New wave of shutdowns and layoffs puts Argentine industry on alert

[oil rush]

This is a really interesting thread. I have a thirty thousand foot view of Argentina's economy from watching it over the years but zero on-the-ground knowledge, so I learned an awful lot here. It was inevitable that Argentina's economy would hit the wall, you just never knew when or how it would play out. I just hope they can hang on long enough to get to the other side of this. No doubt it is incredibly painful for locals losing their jobs and businesses.

But there in lies the question. What does the other side of this mean? It would take many terms of many Milei's to get everything you need to get done and I doubt Argentines have the patience for all of this. Someone posted this and it was excellent.

Thread 'Milei’s economy: From surf the wave to kick the can'

Yesterday at 11:13 PM

Good read from my friend Boz. Totally agree with him.

You can divide the views on Argentina and Milei into three camps:

1. Everything is terrible. This is the take of the Peronists, who see Milei undermining the economic safety net for the one-third of Argentines who live in poverty and the many others who struggle economically, even as the macroeconomic indicators come back positively and the wealthy and business elite are doing better than ever. I don’t deal with this view much in today’s newsletter, but be aware that it exists and represents a political threat to Milei...

• Finance Prof
• economy milei
• Replies: 6
• Forum: ExPat Life

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[JonJLA]

But there in lies the question. What does the other side of this mean? It would take many terms of many Milei's to get everything you need to get done and I doubt Argentines have the patience for all of this. Someone posted this and it was excellent.

It has mostly been boom and bust cycles. I remember when people thought Macri was the great hope. He chickened out. I wouldn't want to own a business in Argentina. The safest thing to me was to follow what all the other rich Argentines do and they just keep stacking real estate. I bought my first apartment in BA at the end of 2003. Then bought another one in 2004. It has paid for itself a few times over and I enjoy it when I go down to BA.

It has been almost recession proof and I have had rentals all throughout the time I have owned it. One of the same families that has managed it since I bought it still does and they own about 20 apartments in Buenos Aires in their family. I know of other families that do the same thing. That is the only comfortable investment I will make in Argentina. Unless the tax situation gets solved I can't imagine many companies will want to invest there.

 

[GlasgowJohn]

@JonJLA , How are your expensas for your apartments?

 

[JonJLA]

@JonJLA , How are your expensas for your apartments?

I sold one of them at the peak in 2017 thanks to the suggestion of Mike. I didn't want to sell both of them. I'm paying about 425,000 ($300 dollars) per month for a studio apartment in Palermo Soho. It is full service with 24/7 security, pool and large gym. I heard that isn't bad. Some are paying almost $500 USD for similar set up.

 

[earlyretirement]

@JonJLA , How are your expensas for your apartments?

I have a small studio apartment in Palermo Hollywood and it's up to 585,000 pesos per month. Which is about $415 USD per month which is really insane if you think about it. For comparison, I live in one of the most affluent communities in Southern California. All multi million dollar homes. Guard gated security with multiple entrances and guards at each entrance. For the monthly HOA which includes the security guards at the gate and roving patrol cars going around the community, landscaping of the entire 3800 acres with hiking trails, garbage pickup AND 1 Gig internet and cable TV it's $675 per month.

It's no wonder banks have come out with special loans just for people to take on debt to pay their HOA fees in Buenos Aires. Even nothing special properties with no amenities I'm paying about $350,000 pesos per month on in BA.

 

[CraigM]

It has mostly been boom and bust cycles. I remember when people thought Macri was the great hope. He chickened out. I wouldn't want to own a business in Argentina. The safest thing to me was to follow what all the other rich Argentines do and they just keep stacking real estate. I bought my first apartment in BA at the end of 2003. Then bought another one in 2004. It has paid for itself a few times over and I enjoy it when I go down to BA.

It has been almost recession proof and I have had rentals all throughout the time I have owned it. One of the same families that has managed it since I bought it still does and they own about 20 apartments in Buenos Aires in their family. I know of other families that do the same thing. That is the only comfortable investment I will make in Argentina. Unless the tax situation gets solved I can't imagine many companies will want to invest there.

We kind of looked at it the same way Jon. To own stocks there long term you have to believe the turnaround is real, otherwise you need to be a market timer or good at picking winners and losers. Real estate though was cheap and it cash flowed, which is unique for a big cosmopolitan city, plus you'd always have a great place to visit. As long as BA remains safe & desirable I think it will be very good for us.

 

[earlyretirement]

We kind of looked at it the same way Jon. To own stocks there long term you have to believe the turnaround is real, otherwise you need to be a market timer or good at picking winners and losers. Real estate though was cheap and it cash flowed, which is unique for a big cosmopolitan city, plus you'd always have a great place to visit. As long as BA remains safe & desirable I think it will be very good for us.

Exactly. I have owned Argentine stocks but I buy and sell because you have to take advantage of the ups and downs and the volatility. For real estate I mostly buy for the long term. I bought a bunch of properties in BA at the bottom after the corralito. At one time I personally owned 14 apartments personally in Buenos Aires. I sold all but 2 of them at the peak in 2017/2018. I couldn't bare to not have any properties there so I kept them and they both did well with rentals all the time I have owned them.

Now in 2023 I started buying again and building back up a portfolio. It's still cheap for the world calibre city that it is and they are making excellent cash flow. I bought and renovated an old PH house and just got it up and running and making insane cash flow. Will look for more properties like that.

@JonJLA thanks for trusting me so many years ago. You are one of my first clients. Glad that you still own your place. My best friend (a local in Argentina) and his family bought the 4 units in your building that I owned. I regret not keeping at least one of them. Just like you mentioned, all my wealthy Argentine friends own a lot of real estate in BA.

It's what I noticed once I started buying in 2002. All the politicians and wealthy mostly stick their money in real estate and do so in Buenos Aires. I think when I started buying Cristina and Nestor Kirchner only owned about 2 properties when I started. Look how many they ended up with! 🤣

My latest gem:

Home in Buenos Aires · ★5.0 · 3 bedrooms · 6 beds · 3 baths

Ultra LUXE House -Rooftop Spa, Fire Pit - Sleeps 8

airbnb.com

 

[MikeYoung]

Exactly. I have owned Argentine stocks but I buy and sell because you have to take advantage of the ups and downs and the volatility. For real estate I mostly buy for the long term. I bought a bunch of properties in BA at the bottom after the corralito. At one time I personally owned 14 apartments personally in Buenos Aires. I sold all but 2 of them at the peak in 2017/2018. I couldn't bare to not have any properties there so I kept them and they both did well with rentals all the time I have owned them.

Now in 2023 I started buying again and building back up a portfolio. It's still cheap for the world calibre city that it is and they are making excellent cash flow. I bought and renovated an old PH house and just got it up and running and making insane cash flow. Will look for more properties like that.

@JonJLA thanks for trusting me so many years ago. You are one of my first clients. Glad that you still own your place. My best friend (a local in Argentina) and his family bought the 4 units in your building that I owned. I regret not keeping at least one of them. Just like you mentioned, all my wealthy Argentine friends own a lot of real estate in BA.

It's what I noticed once I started buying in 2002. All the politicians and wealthy mostly stick their money in real estate and do so in Buenos Aires. I think when I started buying Cristina and Nestor Kirchner only owned about 2 properties when I started. Look how many they ended up with! 🤣

My latest gem:

Home in Buenos Aires · ★5.0 · 3 bedrooms · 6 beds · 3 baths

Ultra LUXE House -Rooftop Spa, Fire Pit - Sleeps 8

airbnb.com

You did a terrific job Mike. I looked at some of the renovations photos your company posted on X. It really is remarkable. Congrats.