Socialism and the Damage Done

[CraigM]

https://finance.yahoo.com/news/houston-oil-ceo-calls-venezuela-230656306.html

"Venezuela is uninvestable" - Exxon CEO

For those of you with a soft spot for socialism, Kirchner, Kiciloff and the like, this is the kind of long term damage that socialism will do to a country. The US President is telling major oil companies "we're in control, the oil is bubbling to the surface, go get it" and the oil companies are saying "no way". The reason is that operations like natural resource extraction and distribution require enormous amounts of upfront capital and you need to know that your ability to recoup it all is protected by law, not just now but decades into the future. Like Argentina, Venezuela has outright seized assets and the population has deep socialist leanings and keeps electing people like Kiciloff. So nobody trusts them. Chile and Argentina share many of the same natural resource deposits yet only one of them is benefitting from it. The long term damage to Argentina's economy from this sort of mindset and behavior is mind-boggling when you think of foreign investment, jobs (real ones), exports (bringing in dollars), tax revenues etc.

Socialism is like heroin, feels so good until it feels so bad.

 

[Betsy Ross]

Those companies invested and lost a fortune when they were taken. Argentina had the same sort of thing happen before. We need for it to never go back to the socialists.

 

[Uncle Wong]

https://finance.yahoo.com/news/houston-oil-ceo-calls-venezuela-230656306.html

"Venezuela is uninvestable" - Exxon CEO

For those of you with a soft spot for socialism, Kirchner, Kiciloff and the like, this is the kind of long term damage that socialism will do to a country. The US President is telling major oil companies "we're in control, the oil is bubbling to the surface, go get it" and the oil companies are saying "no way". The reason is that operations like natural resource extraction and distribution require enormous amounts of upfront capital and you need to know that your ability to recoup it all is protected by law, not just now but decades into the future. Like Argentina, Venezuela has outright seized assets and the population has deep socialist leanings and keeps electing people like Kiciloff. So nobody trusts them. Chile and Argentina share many of the same natural resource deposits yet only one of them is benefitting from it. The long term damage to Argentina's economy from this sort of mindset and behavior is mind-boggling when you think of foreign investment, jobs (real ones), exports (bringing in dollars), tax revenues etc.

Socialism is like heroin, feels so good until it feels so bad.

I don't get people voting for Kiciloff. He still seems kind of popular for as popular that Milei is. It seems like Argentina has a long way to go before the risk is gone of the country flipping back to the left. Hopefully Argentina can continue with all the reforms. I have met many people there and it seems like a tough place to run a company.

 

[Bingo]

https://finance.yahoo.com/news/houston-oil-ceo-calls-venezuela-230656306.html

"Venezuela is uninvestable" - Exxon CEO

For those of you with a soft spot for socialism, Kirchner, Kiciloff and the like, this is the kind of long term damage that socialism will do to a country. The US President is telling major oil companies "we're in control, the oil is bubbling to the surface, go get it" and the oil companies are saying "no way". The reason is that operations like natural resource extraction and distribution require enormous amounts of upfront capital and you need to know that your ability to recoup it all is protected by law, not just now but decades into the future. Like Argentina, Venezuela has outright seized assets and the population has deep socialist leanings and keeps electing people like Kiciloff. So nobody trusts them. Chile and Argentina share many of the same natural resource deposits yet only one of them is benefitting from it. The long term damage to Argentina's economy from this sort of mindset and behavior is mind-boggling when you think of foreign investment, jobs (real ones), exports (bringing in dollars), tax revenues etc.

Socialism is like heroin, feels so good until it feels so bad.

I don't doubt oil companies or any other companies wanting to invest in Venezuela. Considering they are still hunting and putting in jail people that supported the Trump invasion. Even in Argentina it doesn't seem like foreign companies are rushing to invest in Argentina. It will probably take Milei winning again solidly to get companies feeling safe but taxes will need to come down.

 

[Nasdaq]

I don't doubt oil companies or any other companies wanting to invest in Venezuela. Considering they are still hunting and putting in jail people that supported the Trump invasion. Even in Argentina it doesn't seem like foreign companies are rushing to invest in Argentina. It will probably take Milei winning again solidly to get companies feeling safe but taxes will need to come down.

It's true. It has been a race to exit for foreign companies. It seems like companies are getting out while they can.

Argentina records negative foreign investment for the first time in over two decades - Buenos Aires Herald

A top Canadian fertilizer company is the latest to leave Argentina, amid a wave of foreign companies selling their operations to local businesses

buenosairesherald.com

 

[Finance Prof]

It's true. It has been a race to exit for foreign companies. It seems like companies are getting out while they can.

Argentina records negative foreign investment for the first time in over two decades - Buenos Aires Herald

A top Canadian fertilizer company is the latest to leave Argentina, amid a wave of foreign companies selling their operations to local businesses

buenosairesherald.com

Many assume because Milei is trying to improve Argentina that many foreign companies are coming. There are a few new stores but it sounds like more are leaving Argentina. I doubt if the labor laws change and taxes are lowered that many will come. The country is very tough to operate a company here. A large part of the economy is in black.

And things can change quickly here. Just because Milei is doing ok now doesn't mean he will be in two years. Argentina has a long history of boom and bust cycles, corruption and defaults. Argentina is structurally a very weak economy and many are taking the opportunity to leave Argentina which is a bit troubling to me.

Reform takes time. There is some success with the RIGI program but actual new capital in flows take time and they could back out. A lawyer that I know well that deals with RIGI planning told me that most of these are just in planning or pre investment stages and might not ever happen. Many foreign companies are in wait and see mode.

Inflation is falling but it is still high by most global standards. Even with all the pro-market talk, Argentina's economy has been contracting. Consumer demand in many areas is weak.

I think if Milei's government is successful with the structural reforms THEN foreign companies will start to think about Argentina. But the strong peso might help with inflation but it hurts with higher labor costs and higher costs to produce goods here. It is not profitable for many foreign companies to operate here.

Keep in mind a few good years doesn't change decades of instability, weak economic fundamentals, tough credit conditions, currency risk problems.

 

[IrishLad]

It's true. It has been a race to exit for foreign companies. It seems like companies are getting out while they can.

Argentina records negative foreign investment for the first time in over two decades - Buenos Aires Herald

A top Canadian fertilizer company is the latest to leave Argentina, amid a wave of foreign companies selling their operations to local businesses

buenosairesherald.com

The companies sound wise to sell while they can and get out. I love Argentina but most of the people I know that have companies here have ended up going out of business.

I hope things turn around long term but my money is things flip around again.

 

[Bharat]

https://finance.yahoo.com/news/houston-oil-ceo-calls-venezuela-230656306.html

"Venezuela is uninvestable" - Exxon CEO

For those of you with a soft spot for socialism, Kirchner, Kiciloff and the like, this is the kind of long term damage that socialism will do to a country. The US President is telling major oil companies "we're in control, the oil is bubbling to the surface, go get it" and the oil companies are saying "no way". The reason is that operations like natural resource extraction and distribution require enormous amounts of upfront capital and you need to know that your ability to recoup it all is protected by law, not just now but decades into the future. Like Argentina, Venezuela has outright seized assets and the population has deep socialist leanings and keeps electing people like Kiciloff. So nobody trusts them. Chile and Argentina share many of the same natural resource deposits yet only one of them is benefitting from it. The long term damage to Argentina's economy from this sort of mindset and behavior is mind-boggling when you think of foreign investment, jobs (real ones), exports (bringing in dollars), tax revenues etc.

Socialism is like heroin, feels so good until it feels so bad.

It is amazing how well Chile works. I can't tell if things are really improving or not in Argentina. Many friends are hopeful but they point out they are much worse off under Milei. I guess we will see.

 

[Bharat]

It's true. It has been a race to exit for foreign companies. It seems like companies are getting out while they can.

Argentina records negative foreign investment for the first time in over two decades - Buenos Aires Herald

A top Canadian fertilizer company is the latest to leave Argentina, amid a wave of foreign companies selling their operations to local businesses

buenosairesherald.com

Wow I am surprised to hear this news. I thought foreign investments were increasing in Argentina. I guess the numbers tell the real story.

 

[Wally]

Wow I am surprised to hear this news. I thought foreign investments were increasing in Argentina. I guess the numbers tell the real story.

We will take wins wherever we can. My wife is thrilled Victoria's Secret opened up here. My kids were happy that Decathlon and Shein stores opened up here.

 

[Bingo]

It's true. It has been a race to exit for foreign companies. It seems like companies are getting out while they can.

Argentina records negative foreign investment for the first time in over two decades - Buenos Aires Herald

A top Canadian fertilizer company is the latest to leave Argentina, amid a wave of foreign companies selling their operations to local businesses

buenosairesherald.com

Thanks for posting @Nasdaq that is an eye opener.

 

[lemonade]

https://finance.yahoo.com/news/houston-oil-ceo-calls-venezuela-230656306.html

"Venezuela is uninvestable" - Exxon CEO

For those of you with a soft spot for socialism, Kirchner, Kiciloff and the like, this is the kind of long term damage that socialism will do to a country. The US President is telling major oil companies "we're in control, the oil is bubbling to the surface, go get it" and the oil companies are saying "no way". The reason is that operations like natural resource extraction and distribution require enormous amounts of upfront capital and you need to know that your ability to recoup it all is protected by law, not just now but decades into the future. Like Argentina, Venezuela has outright seized assets and the population has deep socialist leanings and keeps electing people like Kiciloff. So nobody trusts them. Chile and Argentina share many of the same natural resource deposits yet only one of them is benefitting from it. The long term damage to Argentina's economy from this sort of mindset and behavior is mind-boggling when you think of foreign investment, jobs (real ones), exports (bringing in dollars), tax revenues etc.

Socialism is like heroin, feels so good until it feels so bad.

Socialism never works. Just look at Cuba and Venezuela. Poor people in those countries. Fortunately most were able to flee to other countries. Argentina has also had some lost decades and they aren't out of the woods yet. It's going to take many years to turn things around.

 

[CraigM]

Many assume because Milei is trying to improve Argentina that many foreign companies are coming. There are a few new stores but it sounds like more are leaving Argentina. I doubt if the labor laws change and taxes are lowered that many will come. The country is very tough to operate a company here. A large part of the economy is in black.

And things can change quickly here. Just because Milei is doing ok now doesn't mean he will be in two years. Argentina has a long history of boom and bust cycles, corruption and defaults. Argentina is structurally a very weak economy and many are taking the opportunity to leave Argentina which is a bit troubling to me.

Reform takes time. There is some success with the RIGI program but actual new capital in flows take time and they could back out. A lawyer that I know well that deals with RIGI planning told me that most of these are just in planning or pre investment stages and might not ever happen. Many foreign companies are in wait and see mode.

Inflation is falling but it is still high by most global standards. Even with all the pro-market talk, Argentina's economy has been contracting. Consumer demand in many areas is weak.

I think if Milei's government is successful with the structural reforms THEN foreign companies will start to think about Argentina. But the strong peso might help with inflation but it hurts with higher labor costs and higher costs to produce goods here. It is not profitable for many foreign companies to operate here.

Keep in mind a few good years doesn't change decades of instability, weak economic fundamentals, tough credit conditions, currency risk problems.

Makes sense. I am hopeful for Argentina but my belief is that the hole is so deep and citizens will eventually tire of the endless sacrifices, especially when their President keeps getting caught in scandals. Sooner or later another charlatan will come along promising lots of goodies and voters will fall for it, and the cycle repeats itself. I wish it were otherwise but that is the history of democratic socialism.

 

[lemonade]

Makes sense. I am hopeful for Argentina but my belief is that the hole is so deep and citizens will eventually tire of the endless sacrifices, especially when their President keeps getting caught in scandals. Sooner or later another charlatan will come along promising lots of goodies and voters will fall for it, and the cycle repeats itself. I wish it were otherwise but that is the history of democratic socialism.

This is a good take on it. Hope will only take you so far. People are already getting tired of it. Tough spot to be in where you know the left isn't the solution but the medicine of endless sacrifices is too painful to bear. Maybe they would stick it out longer if Milei and his sister don't get their hand caught in the cookie jar so blatantly so many times.

I guess this is why there are so many ups and downs in Argentina. The other side usually just has to wait a few years and everything changes.

 

[CraigM]

This is a good take on it. Hope will only take you so far. People are already getting tired of it. Tough spot to be in where you know the left isn't the solution but the medicine of endless sacrifices is too painful to bear. Maybe they would stick it out longer if Milei and his sister don't get their hand caught in the cookie jar so blatantly so many times.

I guess this is why there are so many ups and downs in Argentina. The other side usually just has to wait a few years and everything changes.

I used the title Socialism and the Damage Done as sort of a parody of Neil Young's song about heroin which is another infamously tough cycle to break. The user rarely seeks help until they hit rock bottom, when the money's all gone and friends & family avoid them like the plague. Trust is the hardest thing to get back because people will always look at them as the same person who made all those bad decisions and caused so much pain.

 

[Betsy Ross]

Makes sense. I am hopeful for Argentina but my belief is that the hole is so deep and citizens will eventually tire of the endless sacrifices, especially when their President keeps getting caught in scandals. Sooner or later another charlatan will come along promising lots of goodies and voters will fall for it, and the cycle repeats itself. I wish it were otherwise but that is the history of democratic socialism.

This is a good take on things Craig. I am surprised because if I read correctly you've only been in Argentina one or two times but you seem to understand the country more than many that have been here many years.

I have seen different Presidents come and go here. Most promise change. Some deliver a few years. But so far all have failed in the long run. Most get involved with grift or looting of the people they promise to change things for. Milei is doing a lot of good but he and his family have got their hand caught in the cookie jar one too many times for my personal comfort zone. I didn't like when the K's were robbing us so I also don't like when it is done by Milei and his sister now.

This is a good take on it. Hope will only take you so far. People are already getting tired of it. Tough spot to be in where you know the left isn't the solution but the medicine of endless sacrifices is too painful to bear. Maybe they would stick it out longer if Milei and his sister don't get their hand caught in the cookie jar so blatantly so many times.

I guess this is why there are so many ups and downs in Argentina. The other side usually just has to wait a few years and everything changes.

This is my experience in Argentina. Just wait and things will flip around again. I have too many friends here that were initially happy with Milei but most of them are all complaining about one thing or another. I am still cautiously optimistic but with my pension in USD my life doesn't change too much one way or another.

 

[James Bond]

I used the title Socialism and the Damage Done as sort of a parody of Neil Young's song about heroin which is another infamously tough cycle to break. The user rarely seeks help until they hit rock bottom, when the money's all gone and friends & family avoid them like the plague. Trust is the hardest thing to get back because people will always look at them as the same person who made all those bad decisions and caused so much pain.

Great song. Great comparison. Many ideas that Milei has are great and bring some temporary relief but I can't say I see long lasting change. I moved to Spain last year and glad I did. Costs have spiraled out of control with once affordable things like my girlfriend's kid's tuition. It would be $1,000 USD per month now in Buenos Aires and it is not some elite school. Decent private school.

I guess we will see how things go around the next election.

I caught you knockin' at my cellar door
I love you, baby, can I have some more?
Ooh, ooh, the damage done

I hit the city and I lost my band
I watched the needle take another man
Gone, gone, the damage done

I sing the song because I love the man
I know that some of you don't understand
Milk-blood to keep from running out

I've seen the needle and the damage done
A little part of it in everyone
But every junkie's like a setting Sun

 

[Bingo]

Great song. Great comparison. Many ideas that Milei has are great and bring some temporary relief but I can't say I see long lasting change. I moved to Spain last year and glad I did. Costs have spiraled out of control with once affordable things like my girlfriend's kid's tuition. It would be $1,000 USD per month now in Buenos Aires and it is not some elite school. Decent private school.

I guess we will see how things go around the next election.

I caught you knockin' at my cellar door
I love you, baby, can I have some more?
Ooh, ooh, the damage done

I hit the city and I lost my band
I watched the needle take another man
Gone, gone, the damage done

I sing the song because I love the man
I know that some of you don't understand
Milk-blood to keep from running out

I've seen the needle and the damage done
A little part of it in everyone
But every junkie's like a setting Sun

Awesome song! @James Bond how long did you live in Argentina? I am seeing that plenty of people have left Argentina. I am surprised as I thought Milei was making progress. The school tuition is a complaint I hear often. A friend has two kids and she is paying $2000 a month for both. I just don't know how the typical family with kids makes it here. What was the straw that broke the camels back with you leaving?

 

[CraigM]

This is a good take on things Craig. I am surprised because if I read correctly you've only been in Argentina one or two times but you seem to understand the country more than many that have been here many years.

I have seen different Presidents come and go here. Most promise change. Some deliver a few years. But so far all have failed in the long run. Most get involved with grift or looting of the people they promise to change things for. Milei is doing a lot of good but he and his family have got their hand caught in the cookie jar one too many times for my personal comfort zone. I didn't like when the K's were robbing us so I also don't like when it is done by Milei and his sister now.

Thank you Betsy, I was actually quite surprised that Milei would sacrifice his honor and respect for a few dollars. For awhile he held the world's attention as a crusader and a fresh face in South America, rooting out bureaucracy and corruption. The world was his oyster. Now he's just another bent politician in the eyes of foreigners, basically damaged goods. Articles about him in my newsfeed went from fascination to clickbait. Most of you locals saw this coming, but I did not.

 

[Bingo]

Thank you Betsy, I was actually quite surprised that Milei would sacrifice his honor and respect for a few dollars. For awhile he held the world's attention as a crusader and a fresh face in South America, rooting out bureaucracy and corruption. The world was his oyster. Now he's just another bent politician in the eyes of foreigners, basically damaged goods. Articles about him in my newsfeed went from fascination to clickbait. Most of you locals saw this coming, but I did not.

That is what stumps me. If he just didn't fall into the same trap as other crooked Argentine politicians he could have wrote his own ticket and printed money after he got out of office. People can't resist. Before it was mostly positive reputation but a lot of foreigners in Argentina and around the world see him and his sister as crooks. Politics are very partisan here in Argentina just like America.

That crypto scandal and then robbing the healthcare system here just don't make me believe things will change. Just like half the population let Kirchner's steal and lie and rob them blind half now feel the same about Milei. I'm not sure you can turn things around when you have someone willing to rob from people sacrificing.