09 octubre 2013

9 octubre 2013 Pacifico y EMEA

Siguiendo con el análisis de fondos alternativos por zona geográfica, tanto el Pacifico como el EMEA son de los mejores del mercado. ¿Hemos tenido suerte? No. No lo hacíamos tan mal… Mira la comparación:
PD1: En Venezuela la hiperinflación está siendo alucinante. La bolsa se ha triplicado desde mayo pasado, pero la devaluación del bolívar es descomunal… Desabastecimiento e inflación…, mala cosa para las empresas con intereses allí. Mala cosa para los venezolanos que se empobrecen a marchas forzadas…¿Quién será el próximo? Mira esto:
We want to take this opportunity to show an update of the hyper-inflationary crack-up boom that is accompanying these widespread shortages of consumer goods. Readers will recall that we mentioned in our missive on 'forced saving' that hyper-inflationary crack-up booms give us an excellent opportunity to see the economic effects of inflationary policy in a temporally compressed manner. One major effect is that investment moves into the higher stages of production (capital goods) to the detriment of the lower (consumer goods) stages.
In other words, the production of consumer goods begins to suffer as more and more production factors are deployed in the production stages furthest away from the consumer. As a consequence, titles to capital – i.e., stocks, tend to rise strongly in value, not least because they are seen as an effective means to  protect one's savings against the ravages of inflation. What is currently playing out in the US economy on account of 'QE' is merely amilder version of the very same principles.
The Caracas stock Exchange Index. Since we last reported on it in May, its value has more than tripled! .
The shortage of consumer goods in Venezuela is in fact what the 'forced saving' consists of. The pool of real funding, i.e., the pool of final goods that sustains workers, has shrunk and many of the items required to sustain them are not even available anymore at all. We suspect that by now, the damage is so great that the boom can not be kept going for much longer.
Below is a chart of the Bolivar currency, showing the true black market rate compared to the official exchange rate. Unfortunately we have no more recent update, but the black market rate has since then fallen considerably further. In fact, as Reuters reports, there is a brisk arbitrage trade going on. Venezuelans pretend to travel overseas in order to buy dollars at the official exchange rate, and then sell them on the black market, where the dollar currently trades at a new record high of 7 times the official rate.
“After a decade of currency controls set up by late socialist leader Hugo Chavez in 2003, the disparity between the official and black-market rates for the local bolivar currency is higher than ever. Greenbacks now sell on the illegal market at about seven times the government price of 6.3 to the dollar.
There are strict limits on the availability of dollars at the 6.3 rate, but Venezuelans are cashing in on a special currency provision for travelers. With a valid airline ticket, Venezuelans may exchange up to $3,000 at the government rate. Some are not even flying, leaving many planes half empty.
"It is possible to travel abroad for free due to this exchange rate magic," said local economist Angel Garcia Banchs.
The profit is realized from an arbitrage process known locally as "el raspao," or "the scrape."
The bolivar's official and black market exchange rates up until May 2013.
In order to visualize the current status, just consider that the rate is now approximately at 45 bolivar to the dollar instead of the 33 recorded in May. Venezuela is yet another excellent case study for the end game of an inflationary policy.
It is quite amazing that we still get to see so many of these crack-up booms in modern times. Only recently there was the Zimbabwe case and currently we can observe the still ongoing Venezuelan and Iranian hyperinflation regimes. The boom in Caracas is well advanced, so the final collapse cannot be too far away. Stay tuned.
PD2: En Grecia se podría confiscar los ahorros de los inversores en los bancos…, y mucho más:

The last time we opined on the possibility of a Cyprus-style "bail-in" in Greece, which is essentially a legally-mandated confiscation of private sector assets held hostage by the local financial system, until such time as the balance sheet of said financial system is viable, we were joking. Well, not really joking.
But not even we thought that a banking sector "bail in", in which unsecured bank liabilities, which include bonds and of course deposits, are used as a matched source of extinguishment of non-performing bad debt "assets" could spread to the broader economy, and specifically to unencumbered private sector assets. Alas, this is precisely what Greece, which is desperately to delay the inevitable and announce it needs not only a third but fourth bailout, appears keen on doing.
As Kathimerini reports, the Greek Labor and Social Insurance Ministry is "seriously considering drastic measures in order to obtain the social security contributions owed by enterprises and to avoid having to slash pensions and benefits." What drastic measures? "The ministry is planning to force companies to pay up or face having their assets seized, so that the 14 billion euros of contributions due can be recouped."
After all, it's only "fair."
Kathimerini is kind enough to layout the clear-cut problems with this plan which will further crush any potential rebound in the Greek economy:
While this amount – equal to 8 percent of the country’s gross domestic product – may be easy to calculate on paper, it is virtually impossible to collect even if the state attempts to confiscate all the real estate properties of debtors and the debts of third parties to them.
The ministry has been forced to consider asset repossessions as a result of the very poor state of social security funds. The fiscal gap expected at the end of the year from social security will at best be equal to 1.06 billion euros. This also constitutes a bad start for next year, too, when the budget will also provide for a reduction in state subsidies to social security funds by 1.8 billion euros.
Aside from the obvious, namely that this "plan" will be merely the latest disaster to hit the long-suffering Greek economy, now caught in the worst depression in history, and where greedy and corrupt politicians will promptly "confiscate" whatever benefits there are to have been made from this confiscation plan (however instead of accusing corruption all blame will be once again fall on (f)austerity), the greater problem is that any entrepreneurial confidence that Greece just may be a sound place to do business, has just gone out of the window as nobody will know if they are safe from arbitrary persecution, and subject to a wholesale asset confiscation at any moment in time.
However, none of the above gives us more confidence that things in Greece are about to go from horrifying to nightmarish, than the following FT story: "John Paulson and a clutch of bullish US hedge funds are leading a charge into Greek banks, confident that Greece, long seen as the weakest economy of the eurozone periphery, is on the turn."
Right. A 360-degree turn.
The good news: at least the Greek government will have a lot of "greater fool" assets to pick and choose from when the confiscation hammer hits.
PD3: Juzgamos demasiado. Cuando algo en otra persona me molesta, trato de pensar primero: ¿Hago yo eso mismo sin darme cuenta? Ayuda muchísimo en la convivencia…