peso in trouble

[Don Gringo]

Some time ago I said if we tested 2K and did not close below it we were going to move higher. Well that is what we are doing. Not sure if this is the big one or not but would not be surprised if it were the run to an eventual 4k. No I am not crazy! jaja

Live rates at 2009.06.25 13:32:54 UTC
1.00 USD = 2,206.00 COP
United States Dollars Colombia Pesos
1 USD = 2,206.00 COP 1 COP = 0.000453310 USD

[Don Gringo]

In Colombia, the peso weakened 0.7 percent to 2,174.27 per dollar, from 2,159.75 yesterday. The yield on the country’s 11 percent bonds due in July 2020 fell six basis points to 9.48 percent. The price rose 0.450 centavo to 110.154 centavos per peso, according to Colombia’s stock exchange.

bloomberg


Colombia Likely to Enter Recession for First Time in a Decade

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By Helen Murphy and Alexander Cuadros

June 25 (Bloomberg) -- Colombia’s economy probably shrank for a second straight quarter, putting the country in its first recession in a decade after the global slump cut exports and domestic demand fell.

The national statistics agency may say today that gross domestic product contracted 1.3 percent in the first three months of the year, according to the median estimate of 18 economists surveyed by Bloomberg. That follows a 0.7 percent decline in the final quarter of 2008 as the central bank pushed interest rates to the highest since 2001, curbing demand.

“We hit bottom in the first quarter,” said Julian Cardenas, an analyst at Bogota-based brokerage Corredores Asociados. “It wasn’t a hard landing but rather a gradual slowdown.”

Colombia’s central bank and government were slow to respond to the economic crisis in the U.S., Cardenas said. To spur growth in Latin America’s fifth-biggest economy, policy makers have slashed interest rates from a record 10 percent in November to 4.5 percent on June 19.

Plans to stimulate growth with subsidies for housing and appliances as well as credit lines for cars didn’t come until the second quarter of this year, Cardenas said. A cut in the overnight lending rate takes about 18 months to have an effect on the economy, according to the central bank.

First Recession

The result may be the country’s first recession, defined as two consecutive quarters of shrinking GDP, since 1998 and 1999, when insurgent violence and a banking crisis helped trigger six straight quarters of contraction.

First-quarter GDP will be announced in Bogota at 12 p.m. New York time.

Manufacturers, retailers and the construction industry may lead the quarterly contraction. Industrial output fell 12.4 percent in February from a year earlier, while retail sales dropped 6.9 percent in March.

Total exports dropped 13 percent in the first quarter to $7.5 billion from a year earlier led by oil and nickel. The urban jobless rate rose to 14.9 percent in January, the highest level since the same month in 2006.

“The GDP data could give us a big fright,” said Guillermo Botero, head of Colombia’s biggest retail association, who expects a contraction of 1.5 percent in the quarter. “I don’t see growth this year unless there is spending in public works.”

Public Works

Botero said he’s concerned that not enough of the 55 trillion pesos ($25.4 billion) the government pledged to spend this year on infrastructure projects has been released.

The government has said the economy will remain weak in the second quarter and then rebound during the second half of the year. Finance Minister Oscar Ivan Zuluaga said June 16 that GDP may grow 0.5 percent this year, adding that he may revise that estimate after today’s data. The central bank forecasts zero growth this year.

“Domestically, there’s not a whole lot of room to stimulate the economy,” said Carola Sandy, an economist at Credit Suisse Group AG in New York who expects GDP to contract 0.8 percent in the quarter and finish the year down 1 percent.

“The central bank has done a ton by cutting 550 basis points from the lending rate, but there’s not much the government can do, they can’t spend anymore,” Sandy said.

Zuluaga said last week that the government expects a budget deficit this year of 11.8 trillion pesos, or 2.4 percent of GDP, and next year of 18.4 trillion pesos or 3.4 percent.

The country’s economic growth slowed in all four quarters of 2008, the longest period of deceleration since the end of 1999. At the time, a banking crisis shuttered lenders and led Colombia’s government to nationalize several banks.

President Alvaro Uribe has asked Colombians to maintain confidence and continue to invest despite the global crisis.

“It’s not at all clear the economy will recover in the second half,” said David Duarte, a Latin America analyst at 4Cast Inc. in New York, who predicts a 1.3 percent contraction in the first quarter. “If the quarterly figure comes at the lower end of estimates, around negative 2 percent, the market would think the government foolish to keep saying there will be growth this year.”

To contact the reporters on this story: Helen Murphy in Bogota at [e-mail]; Alexander Cuadros in Bogota at [e-mail]

Last Updated: June 25, 2009 06:51 EDT

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aHnil_LO...

[Don Gringo]

Read that article carefuly. The central bank and Uribes propoganda machine is forecasting .5 or zero growth this year where as the experts are forecasting a retraction. The Colombian government is NEVER right in its forecasts, in fact they along with the central bank are full of shit bullshit artists. They ahve been doctoring numbers like Castro for years now. Things here are much worse than people realize and soon it will be impossible to hide it so watch the currency. That is the true predicter and 2300 here we come. We have come a long way on this government manipulation of data so look out below....

[David Barkley]

Its 2154 today, July 1st.

Don't know if my planned Colombia job, will ever pan out, people who were supposed to hire me do not even respond, and last I heard from them 2-3 weks ago was some delay in the operation insured (surety bond) for the bank to lend.

[Don Gringo]

I would not be surprised if the job just went poof. I can not put much faith in beleiving that the banking crises is not going to come to Colombia. I just do not see where Colombia is different than the rest of the world. They have seen a tremendous boom in credit cards, cars on credit and home loans like never before. The roads are jammed with cars that people have bought on easy credit, restaurants have boomed (along with prices) from people who have paid for meals on credit. It is the biggest and fastest credit bubble I have ever seen or heard of.

Now that it is tightening up the domino effect has got to come into play. I know one thing the people I know are worried, money is tightening up. My new business is going pretty good though I will say and it deals with high end murchandise. So as usual the people with money in Colombia will always have money. The middle class people are not lining up anymore to buy the niceties they once craved though. I can say that for sure.

[Don Gringo]

Did you ever hear from them David? Anything I can check on for you? From here?

[David Barkley]

Yes, its still in the works, the process is slow.
A sure thing , just a matter of time, looks like Sept.

[Don Gringo]

beers on me when you get here. If I am here?

[David Barkley]

Will not be settled into Colombia till mid Sept-Oct.
Ha, DG and can discuss bringing Colombians in, at $10k a pop, he has the easy job, sailing in relaxing international waters, I have the tougher /risker job, being the runner, bringing them into shore.

Freaking pesos almost at 2.000 again, Obama printing money, weakening US currency.
Silver lining for me , that should keep oil high, at least not much lower, which will be good for me in my new business.

[Don Gringo]

I gave up on waiting for the peso to blow up which it will. I am always ahead of everything. Obama looks like he wants another stimuless package even though the first one did not do what he said it would. Unemployment going straight up!

So that will hurt again but not too much because everyone is printing money these days. What is hurting the dollar is the run up on the stock market. The reversal of positions that went to the dollar for security. Economy gets better dollar goes down, etc.

My new business which I wish I would have started 2 years ago..... is ok with a low dollar. So I don't loose sleep over it or exchange dollars to pesos which is enough to give you an ulcer when you can remember doing it at 2950 to 1....

[Don Gringo]

Oh boy!

I see it now below 2k That is BIG if it closes down there or stays below for a period of time then we go to 1800. Good for imports! If it goes to 1500 the exporters will drop like flies. They can not take another hit like that. I beleive so many of them will throw in the towel. Inflation along with that? A death sentence. Fruit, Clothing exporters being the first to go down.

Live rates at 2009.07.21 13:49:54 UTC
1.00 USD = 1,986.25 COP
United States Dollars Colombia Pesos
1 USD = 1,986.25 COP 1 COP = 0.000503461 USD

[David Barkley]

And we have to pay for Army bases in Colombia!!!!!, the US has been duped again, just like sucker middle aged gringos have been by Colombian chicas.

Which Pentagon or Army official got laid? (I should say how many)





Don Gringo said:

I gave up on waiting for the peso to blow up which it will. I am always ahead of everything. Obama looks like he wants another stimuless package even though the first one did not do what he said it would. Unemployment going straight up!

So that will hurt again but not too much because everyone is printing money these days. What is hurting the dollar is the run up on the stock market. The reversal of positions that went to the dollar for security. Economy gets better dollar goes down, etc.

My new business which I wish I would have started 2 years ago..... is ok with a low dollar. So I don't loose sleep over it or exchange dollars to pesos which is enough to give you an ulcer when you can remember doing it at 2950 to 1....

[Don Gringo]

Yep I hate that too. Why are the American people so missinformed? Don't they know this governemnt is corrupt and that is why there is no money for their own military? It is just more people at DOD cataring to the big money brokers like Drummond and Boeing and GE, on and on. I think they would like to have anohter stinky war to make the stock go up.

I also wish the middle aged gringos could see what I see with my eyes here. They would run to the airport.

It has been a long time here and boy I could get laid tonight if I told any one of them I was visiting and spoke no spanish. Telling them I live here is and that I like it here is the equivelent to farting in their faces. Hypocrites all