Utility hikes of up to 327% threaten the University of Buenos Aires budget.

The Supreme Council of the University of Buenos Aires announced that an emergency "interim" budget will be approved in the coming days because, according to university authorities, the current budget does not cover costs arising from rescinded subsidies and increased tariffs enacted by the right-wing Macri administration.

The University of Buenos Aires (UBA), with 320,000 students, is the largest in Argentina and the second largest in Latin America after the National Autonomous University of Mexico (UNAM).

The current operating budget, signed by former President Cristina Fernández de Kirchner last October, granted the UBA a 2016 budget of 8.7 billion pesos ($600 million) - an increase, in pesos, of 30% from 2015. The budget passed in October did not, however, contemplate the sudden increase in operating expenses stemming from President Mauricio Macri's decree rescinding subsidies for utility rates and other costs.

Like most customers, the UBA paid 327% more for electricity, 249% more for water, and 143% more for gas than it did at the same time last year; electricity charges alone will jump from 19 million pesos ($2 million) in 2015 to 84 million pesos ($6 million) this year. UBA authorities estimate that the budget for general operating expenses, which was increased only 1.5% to 660 million pesos ($45 million) this year, will run out sometime in August - nearly four months before the end of the academic year.

The Ministry of Education indicated that 200 million of a 330 million peso ($23 million) debt from the federal government to the UBA has recently been covered. The University Student Federation (FUBA) pointed out, however, that an additional 711 million pesos ($50 million) approved in the federal budget last October for the UBA's teaching hospital and other health facilities has yet to be disbursed.

The option of dipping into the payroll budget is likewise limited, since most of the budget increase for this year has been absorbed by salary hikes already agreed to in collective bargaining. This year's, meanwhile, is still in deadlock as a result of the Macri administration's decision to offer UBA staff a 15% raise until October - a mere third of the projected annual inflation by then.

CONADU, the union representing the UBA's 32,000 teaching staff and 15,000 auxiliary staff, held a strike on April 27 and 28 to protest the decision.

At: https://translate.google.com/translate?hl=en&sl=es&u=http://www.clarin.com/sociedad/UBA-afirman-presupuesto-alcanza-agosto_0_1562843942.html&prev=search

Bernie Sanders: America’s most popular senator.

He may never be president. But Bernie Sanders is America’s most popular senator.

The least popular? Kentucky’s Mitch McConnell, the Senate Republican leader.

They top the list of most popular and least popular senators in their home states, measured by Morning Consult, a nonpartisan media and survey technology company. It surveyed 62,288 registered voters across the nation since January.

It found potential trouble for vulnerable Republicans this fall. The party now has 54 of the Senate’s 100 seats; but 24 GOP seats are up and at least six are regarded as potential pickups for Democrats. Ten Democratic seats are in play; but only one, Nevada, is seen as a possible GOP gain. The shaky Republican incumbents all hail from states President Barack Obama won four years ago.

They include: Sens. Pat Toomey, R-PA, 46%; Rob Portman, R-OH, 44%; Ron Johnson, R-WI, 43%; and Mark Kirk, R-IL, 39%. Sen. Kelly Ayotte, R-NH, had 54% approval.

At: http://www.miamiherald.com/news/politics-government/election/article74288627.html#storylink=cpy
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This is the second year in a row Bernie Sanders has earned this honor.

The ten most popular senators were:

1) Bernie Sanders (I-VT)
2) Susan Collins (R-ME)
3) John Hoeven (R-ND)
4) Angus King (I-ME)
5) Patrick Leahy (D-VT)
6) Thomas Carper (D-DE)
7) Amy Klobuchar (D-MN)
8) John Barrasso (R-WY)
9) Al Franken (D-MN)
10) Chris Coons (D-DE)

Argentina to seek $8 billion via new bonds as budget deficit rises by 60%.

Argentina will issue a fresh round of dollar-denominated debt notes worth an estimated $8 billion in the next few days, top officials from the Finance Ministry confirmed yesterday.

The government hopes to bring in $5 billion through the issuance of treasury notes. In addition, a further $3 billion in bonds will later be offered to larger offshore funds willing to invest in the country, while a re-financing process will address the $5 billion due on old bonds maturing this year.

The Macri administration's financial program for FY 2016, announced yesterday by Finance Secretary Luis Caputo and Deputy Minister Pedro Lacoste, estimates that Argentina will need $37 billion in order to finance the current fiscal deficit (projected at $24.2 billion), as well as an additional $12.4 billion in outstanding foreign debt payments.

While Lacoste described this year's budget deficit as “complying with our targets,” the projected 360 billion peso deficit is a 60% increase from the record 225 billion pesos registered in 2015 - one of President Mauricio Macri's central campaign themes last year. The budget deficit in dollar terms would remain virtually unchanged at $24 billion as a result of Macri's devaluation in December; but would rise as a share of GDP from 4.1% in 2015 to 4.8% this year (the highest since 1990).

Financing sources

Argentina retained over $7 billion from the $16.5 billion global bond sale last week, the remainder being used to pay off holdout bondholders. That leaves $30 billion needed to finance the deficit and debt payments due this year, which will come from a variety of sources.

According to officials an additional $3 billion from bond sales, $5 billion in re-financed bond maturities, and another $5 billion from the dollar-denominated LETES Treasury notes auction will plug the remaining gap. The ANSES social security agency and other public agencies will chip in $2.7 billion, while bilateral and multilateral loans are expected to raise a further $3 billion. Borrowing from the IMF, whose debt Argentina canceled in 2006, will be avoided in favor of World Bank loans of up to $2 billion.

The successful international bond sale last week, the largest in third world history, has given the Macri administration hope that future debt roll-overs will pay lower interest rates than the relatively high 7.25% offered in last week's issuance in order to stoke interest.

The Central Bank will continue to serve as the largest source of fiscal financing, however. It will emit 160 billion pesos ($11 billion) for this purpose, or around a third of the remainder. This means that, contrary to Macri's assertion during the 2015 campaign, the Central Bank will continue to “print” money throughout this year - although at a slower pace than the 37% growth in the monetary base registered in 2015. Analysts believe the slower pace will reduce inflation in the second half of the year, though at the cost of triggering a recession and in any case not enough to meet this year’s targets.

Foreign debt, meanwhile, is likely to play an increasing role in Argentina's finances. This is a sharp departure from the Kirchner era, at the end of which only a third of Argentina's $240 billion public debt was to foreign creditors (compared to two thirds in 2003).

At: http://buenosairesherald.com/article/213415/gov%E2%80%99t-to-seek-us$8b-via-new-bonds

Austerity leads to credit crunch in Argentina.

Figures published today by the Argentine Central Bank show that the country's credit market shrank by 0.7% in first quarter of 2016 from the same time a year ago - a sharp contraction of 25% in real terms considering that inflation has risen to around 33% in the same period.

The figure is in stark contrast to 2015, when credit in Argentina expanded by 37% while prices did so by about 25%. Growth in every major type of credit slowed: business loans, which had grown by 40% in 2015, declined by 6.6% in the first quarter; mortgage loans (which never fully recovered from the 2002 crisis) grew by 15% in 2015 but declined 1% in the first quarter; and revolving credit, which helped fuel record sales of big ticket items, rose 57% in 2015 but declined 5% in the first quarter.

The sudden credit crunch in Argentina coincides with monetarist policy adopted by the Central Bank since President Mauricio Macri took office four months ago. His Central Bank president, Federico Sturzenegger, has made curbing growth in the monetary base a policy centerpiece in keeping with Macri's campaign promise to control inflation (which had averaged 25% under his predecessor).

Their own 40% devaluation in December, however, later forced Sturzenegger to double central bank interest rates to 38% to stop a run on the peso in February. The hike in interest rates calmed the currency crisis; but has strangled the country's already tight credit market.

Access to credit was further dampened by the Macri team's decision to limit access to the Productive Investment Line for businesses and to the PROCREAR low-interest mortgage program, which had issued over 200,000 mortgages to new homeowners since it was enacted by former President Cristina Fernández de Kirchner in 2012. Fees and commissions also weighed on credit after lending regulations were dismantled as part of the new team's laissez faire approach.

The credit crunch has exacerbated a sharp recession first triggered by the December devaluation and the sudden jump in consumer prices that followed. While Macri has refused to release monthly economic data since he took office, the estimated 141,000 layoffs and 28% deterioration in consumer confidence since November indicate that real Argentine GDP may decline for the first time since 2002.

Amid an increasingly negative business outlook, the increased foreign investment the Macri administration committed itself to incentivizing has failed to materialize. Alfredo Cornide of the Chamber of Medium Enterprises (CAME) believes the country has entered a vicious circle in which higher unemployment means lower consumption, which in turn prompt companies to dismiss even more staff.

Juan Carlos Sacco of the Argentine Industrial Union (UIA) agrees, estimating that the combined recession with rate hikes will cause between 100,000 and 200,000 layoffs in the manufacturing sector alone. Argentine firms could be especially hard hit, Sacco pointed out, since the local affiliates or partners of foreign manufacturers can usually access credit from their parent companies.

At: https://translate.google.com/translate?hl=en&sl=es&u=http://www.pagina12.com.ar/diario/economia/2-297863-2016-04-26.html&prev=search

And: https://translate.google.com/translate?hl=en&sl=es&u=http://www.pagina12.com.ar/diario/elpais/1-297874-2016-04-26.html&prev=search

Argentine President Mauricio Macri and top protégé, Néstor Grindetti, charged in Panamá Papers case.

Argentine Prosecutor Martín Niklison has filed charges against President Mauricio Macri and a top political protégé, Lanús Mayor Néstor Grindetti, over allegations of hiding offshore companies when they were both officials in the Buenos Aires municipal government. The charges are based on proof that emerged recently as part of the international Panamá Papers scandal.

Prosecutor Estela Andrades presented a separate motion to Federal Judge Sebastián Casanello that this probe be unified with the already existing investigation into President Macri's participation in the Mossack Fonseca offshore shell company scheme. Between the Panamá Papers and Open Corporate leaks, Macri's name has been found in at least nine such accounts.

Lanús Mayor Néstor Grindetti, a former municipal finance minister during Macri's tenure as mayor, was listed on Interpol records as “wanted by the judicial authorities of Brazil for prosecution” for alleged “crimes against the tax authorities and consumer relations.” Grindetti's spokesman dismissed the charges, sending journalists an excerpt of a ruling issued on April 21 that cleared him from all charges related to a case titled “Pablo Tomás Boero and others.”

The Boero ruling, however, confirmed that Grindetti had an international arrest order issued by a court in Curitiba, Brazil, and that the order was active from December 14, 2012, until March 30, 2016. Carlos Gonella, head of the PROCELAC money laundering prosecutor's office, petitioned Judge Casanello to open a probe against Grindetti for “malicious omission of data.”

According to the documents released to the ICIJ, the Mossack Fonseca law firm helped Grindetti establish a shell company known as Mercier International in July 2010. Two weeks later, he opened an account at the Switzerland-based bank Clariden Leu AG. This bank is connected to Credit Suisse, which received a commission in the sale of Tango 8 municipal bonds issued by the city that year.

Opposition Buenos Aires City legislators have called for an investigation into whether Grindetti used his offshore accounts to receive kickbacks from the issue of Tango 8 bonds, and whether they were also used to finance Macri's right-wing PRO party.

At: http://buenosairesherald.com/article/213250/panam%C3%A1-papers-another-accusation-against-macri-and-grindetti

Panamá Papers: President Macri's Legal & Technical Secretary acted as intermediary in his offshoring

Information recently uncovered as part of the Panama Papers scandal that has embroiled Argentine President Mauricio Macri has now revealed that the Legal and Technical Secretary to the President, Pablo Clusellas, acted for 10 years as the broker between Macri and the Panamanian corporate law firm at the center of the scandal, Mossack Fonseca.

The Buenos Aires law firm in which Clusellas was a partner from 1999 to 2009 (Romero, Zapiola, Clusellas & Monpelat) appears listed in the Panama Papers leak as an "intermediary" between Mossack Fonseca and the Argentine owners of numerous offshore shell companies - including the Macri family's Sinosocma SA. Clusellas organized the legal and accounting structure of these offshore investments and even served in the Sinoscoma board of directors as recently as 2006.

Clusellas, a personal friend of President Macri since they were both children, officially left the law firm when Macri appointed him Legal and Technical Secretary to the Mayor of Buenos Aires upon taking office in 2007. The law firm's own public records, however, show that Clusellas remained a partner as late as 2009. His own asset declaration from 2014 show, moreover, that he retained a 1% share in the law firm.

Mossack Fonseca documents prove that lawyers from the disgraced Panamanian firm, which specializes in creating offshore shell companies for clients around the world, first visited Clusellas in his Buenos Aires office May 4, 1999. The Panamanian lawyers, per leaked documents, "presented new services, information, and techniques (Clusellas) did not know about, despite having great knowledge in this area himself."

At: https://translate.google.com/translate?hl=en&sl=es&u=http://www.ambito.com/836423-panama-papers-secretario-legal-y-tecnico-oficio-de-intermediario-para-firmas-offshore&prev=search
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[center]Why, it's 'law-and-order' man - President Panamacri.

[/center]

Amid 70,000 state layoffs, Macri hires image coach to make his wife into "the new Michelle Obama"

Argentine President Mauricio Macri makes no apologies for the 70,000 state layoffs ordered since he took office four months ago, referring to the fired employees as "junk contracts." He did, however, find room in his austerity budget for an image consultant for his wife, the socially maladroit First Lady of Argentina Juliana Awada.

The consultant, María Reussi, was given the newly created post of Assistant to the President on Matters of the First Lady and earns 90,000 pesos ($6,300) a month - a salary approaching that of the President's (130,000 pesos) and nearly six times the median full-time pay in Argentina. Her job, according to Reussi herself: "create a modern First Lady, in the style of Michelle Obama."

Introduced to Macri in 2003 during his failed first bid for Mayor of Buenos Aires by his now Chief of Staff Marcos Peña, Reussi is described as "Juliana's shadow." Her role goes far beyond that of the First Lady's social secretary (her official purview), instead including daily advice as to what to say, where to go, and how to behave in the political arena.

Reussi's task has not been easy. Ms. Awada is, despite being 42, very much a traditional First Lady who avoids speaking in public - least of all taking strong public policy positions like the last woman to serve as Argentina's First Lady, Cristina Fernández de Kirchner, did during her husband Néstor Kirchner's 2003-07 term. Awada's first public speech as First Lady, in fact, was for a joint appearance with U.S. First Lady Michelle Obama during President Obama's state visit in March - a speech Reussi wrote. There have been none since.

Nevertheless as part of what Reussi refers to as the First Lady's "Obamization," Awada has been encouraged to appear in supermarkets from time to time and has even planted a vegetable garden on the grounds of the Quinta de Olivos presidential residence in suburban Buenos Aires.

But the differences with the adopted template aren't limited solely to Awada's professional background (or lack thereof). Whereas Mrs. Obama is an accomplished lawyer with a personal history of social and political commitment to her native Chicago, Ms. Awada's work experience is limited to head of fashion design at her family's own boutique chain 'Cheeky' - a firm repeatedly found to be operating sweatshops staffed with undocumented Bolivian immigrants in Buenos Aires' garment district.

María Reussi, however, isn't daunted. "You will want to give the impression of an active woman from the professional standpoint, and not so much from matters of protocol," she explained, adding that Juliana Awada "has always been committed to social issues. When Macri was mayor, for instance, she visited soup kitchens and child care centers."

At: https://translate.google.com/translate?hl=en&sl=es&u=http://noticias.perfil.com/2016/04/16/la-coach-de-la-primera-dama/&prev=search
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[center]

They're both beautiful. But only one owns a sweatshop.[/center]

Consumer confidence in Argentina plunges 18% from same time last year.

Following massive layoffs and rising inflation figures, consumer confidence in Argentina dropped by another 10.3% in April, and 18.3% compared to the same month last year according to the report published monthly by Torcuato Di Tella University Business School's Financial Research Center (CIF).

The negative outlook was shared broadly across income strata, with confidence declining 10% for those earning below the median (15,700 pesos, or $1,100) and 9.2% for those earning more. There were sharper regional differences, however, with confidence plunging 11.9% in the Greater Buenos Aires area, 11.7% in the country’s provinces, and just 2.5% in the city of Buenos Aires.

Confidence dropped furthest for purchasing durable goods (18.2%) and real estate (7.2%); the durable goods index in particular has plummeted by 60% since November. Confidence in the future of the country’s economy dropped 7.7%, and 11.8% in respondents' own financial situation. 60% of those surveyed still expect their personal finances to improve over the next year (down from 66% in March); but 66% admitted it had worsened from a year earlier (up from 60% in March).

Consumer sentiment has fallen by 28.4% since November 2015, the month before President Mauricio Macri took office. Higher inflation was mostly to blame for the souring mood according to the report, followed by the impact of 127,000 job losses since January.

Prices in Buenos Aires, the recommended index by the national government in the absence of official data under Macri, rose 3.3% in March - accumulating a 11.9% hike on the first three months of the year. The government’s stated goal is to keep inflation below 25% this year; market and labor analysts, however, now believe it will be unlikely to be less than 50%.

At: http://buenosairesherald.com/article/213056/consumer-confidence-plunges-18

Paul Singer’s gushing praise makes awkward reading for Argentina's Macri.

The government’s relationship with some of the most influential players in global finance drew attention yesterday, after a gushing profile written by vulture fund boss Paul Singer praising President Mauricio Macri was published.

Singer, who made billions of dollars thanks to the government’s recent deal with holdout funds, wrote a profile of Argentine President Mauricio Macri as part of Time magazine’s “100 Most Influential People” special edition, in which the Argentine president was named alongside such leaders as U.S. President Barack Obama and Chinese head of state Xi Jinping.

“Macri has removed Argentina’s currency controls, allowing more freedom for trade. He has pledged to reintegrate Argentina into the global economy, seeking private investment from abroad,” Singer wrote, hailing the president as “a champion of reform.”

On the same day other reports emerged indicating the government’s improved relations with credit rating agencies and the International Monetary Fund, Singer praised right-wing leader strongly. Singer also claimed the president “has taken action to end the 15-year default that has kept the country in economic exile since 2001.”

“Macri still has important tasks ahead of him... but if he lives up to his promise, Argentina may finally do the same,” Singer concluded.

The billionaire stands to benefit greatly today from some of those Macri decisions, as the country is expected to pay $2.4 billion to his Cayman Islands-based hedge fund NML Capital in order to settle a decade-long legal conflict that began when other holdout bondholders refused to accept Argentina’s 2005 debt restructuring and sued the country in New York courts. According to Columbia University School of Business Professor Martín Guzmán, those bonds were originally purchased by Singer in 2008 at around $117 million.

When other holdouts are added to the bill, Argentina’s payments today will amount to more than $9 billion.

At: http://buenosairesherald.com/article/213054/paul-singer%E2%80%99s-gushing-praise-makes-awkward-reading-for-president
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A $2.4 billion payout for a $117 million bad faith investment, and that's the thanks Macri gets? The political attack ad practically writes itself with this one.

Argentina says Ciao Default, paying holdouts after 14 years.

Source: Reuters

Argentina paid holdout bondholders on Friday who had refused debt restructurings after a record 2002 default, closing the book on nearly a decade of messy litigation as new President Mauricio Macri embraces global financial markets.

U.S. District Judge Thomas Griesa in Manhattan confirmed the payments and issued an order allowing Argentina to resume servicing its renegotiated bonds, lifting an injunction that had blocked payment to most of Argentina's bondholders since 2014.

The injunction against paying restructured debt was one of many hardball tactics that Griesa authorized against Macri's predecessor, leftist President Cristina Fernández de Kirchner, who denounced the hard-line holdouts as "vulture funds." Those funds, led by London-based Aurelius Capital Management and Paul Singer's Cayman Islands-based NML Capital Ltd, were among hedge funds that received more than $6 billion in settlements on Friday, according to court documents. Argentina also set aside about $3 billion in escrow to cover holdouts that had not settled by Feb. 29.

Payments on bonds restructured in 2005 and 2010 (92%) - the ones blocked in 2014 by Griesa - should resume in the next few weeks, officials led by Finance Minister Alfonso Prat-Gay told investors last week during a road show for Argentina's first global bond sale in 15 years. Argentina sold $16.5 billion of sovereign debt this week, the biggest bond sale ever from an emerging market and the country's first global issue in 15 years. The deal raised funds to pay today's settlements and potentially paved the way for Argentine corporate borrowers.

Read more: http://www.reuters.com/article/us-argentina-debt-idUSKCN0XJ1OO

According to Joseph Stiglitz, this gives TARP baby Paul Singer an 1,180% payout. He bought $48 million in old Argentine bonds in 2008 from a reseller, and stocked up on another $129 million just last year to pass himself off as a "me too" bondholder; his take: $2.25 billion (all going to the Caymans).

Nice work if you can get it.

This payout (and Greasa's rulings) in effect endorses this kind of scam, guaranteeing it will happen again in the future - possibly to U.S. bonds, if Congressional Republicans trigger a default sometime in the next few years.