Re: Imposing the US Dollar on Canada

[Diego Miranda <miranda@xxxxxxxxxxxxxxx>]

Yeah, it is kind of funny (it would be if it were not so tragic) to see
the risk rating of Argentina going down neck to neck with
countries like Nigeria and Ecuador. Remember, though, that such risk
assessment on part of SP and the like has been set at least a couple of
months ago.

About the risk premium (I take it that you are referring to it when you
mention risk rating), it reached a whooping 1300 basic points
yesterday. isnt' it amazing how an indicator that should
reflect the fundamentals of a given economy can somtimes move?  In
september 2000 it was 500 basic points. It grew to 1000 bps by december.
It went down to 700 in early February to go up again to 1000 bps in early
march. Today, by the way, at 14:30 GMP-3 hours, it had gone down to 1180
bps.  In any case, it seems clear that, by that account, Argentina was in
better shape during the hyperinflationary 1989'1990 period than it is
today.

A final note, when I spoke of instability, I meant foreign exchange
instability, and it was not the best choice of words.  My point was that
the dollar has appretiated significantly during the last 3 to 4 years, and
that it will likely fall in the future.

Diego


On Tue, 24 Apr 2001, eperez wrote:

> "The risk of default is zero." I really hope you are right
> I hope that the fact that Argentina's risk rating increased yesterday and
> that the govt decided to suspend the public bidding of gov´t bonds and
> letters reflect only minor fears (and also the fact of being calssified in terms
> of risk with Nigeria and Ecuador). It also
> may be that Argentina's instability is due to the American slowdown.
> But the Argentine economy grew in 1999
> -3.4% GDP and -4.6% GDP per cápita).
>
>