We're a little over halfway through April but I'm sure there are many in the Argentines who wish that the month was already over. The last 2 weeks have not been kind to the Argentinian economy. Stocks are lower, credit default swaps are higher and the Peso continues to weaken. Let's look at the 5 year swap first.
The 5 year is up 13% this month and up over 35% from the swing low established in mid March. Next up is equities where we'll use the benchmark Merval index. It's down 8.4% since April 1st; tied for 4th worst benchmark equity index.
Lastly we have the currency which has not only weakened against the US Dollar in April, but has been on a slow but steady decline since the beginning of 2011. In fact, the next chart will show one of the most even slopes you'll ever see in the chart of a financial entity over a 15+ month time span.
Update: The dire straits that the Argentine economy finds itself in is causing the government to take desperate measures. On Tuesday it was announced that the Argentinian authorities had nationalized the Spanish oil company YPF.
The following is from Reuters:
A surging fuel import bill has pushed production to the top of Fernandez's agenda at a time of worsening state finances in Latin America's No. 3 economy.
[YPF parent company] Repsol, whose shares fell 7.5 percent in Madrid on Tuesday, said the takeover was unjustified and vowed to defend its interests.
"This battle is not over," company Chairman Antonio Brufau said. "The expropriation is nothing more than a way of covering over the social and economic crisis facing Argentina right now."
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