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peppertree's JournalArgentina: Key congressional Macri ally convicted and sentenced on corruption charges
Argentine Congresswoman Aída Ayala, a prominent member of President Mauricio Macri's right-wing "Let's Change" coalition, had an indictment on corruption charges upheld by a federal appeals court today.
Ayala, 65, had been indicted by Federal Judge Zunilda Niremperger on May 28 on money laundering and racketeering charges related to santiation contracts awarded during her 2003-15 tenure as mayor of Resistencia, the nation's 11th largest city.
The $30 million contract had been awarded by Ayala in 2014 to a shell company (PIMP S.A.) established for the purpose by her ex brother-in-law Alejandro Fischer, who placed his fiancée (a fashion model) and her mother as principals.
None have experience in waste management.
Judge Niremperger ordered Ayala arrested, as well as a lien placed on some 200 million pesos ($8 million at the time) in personal assets.
Double standard
Today's ruling upholds the May 28 sentence. Ayala has, however, been shielded by her parliamentary immunity.
Parliamentary immunity requires a two-thirds majority in the Lower House to revoke, and her "Let's Change" caucus has thus far used their narrow majority to block the vote from reaching the floor.
Macri's caucus has come under fire for shielding Ayala, one of his top allies in northern Argentina. Critics note the October 25, 2017, expulsion of opposition Congressman Julio de Vido on similar charges - albeit without yet having been convicted.
Indeed, one of the two charges on which de Vido was indicted - for alleged overpayment for imported natural gas during his 2003-15 tenure as Planning Minister under Macri's predecessor - was later dropped on March 8 on appeal for lack of merit.
The report on which the prosecution has based de Vido's indictment was found to be fabricated and the author of the report, David Cohen, later charged with giving false testimony.
The judge who had commissioned Cohen's report, Claudio Bonadío, is known as Macri's "napkin" (pocket) judge - a nickname he earned in 1996 when a top official under then-President Carlos Menem wrote his name on a café napkin as one of several judges Menem could count on as cronies.
Bonadío currently oversees many of the cases involving former President Kirchner or her cabinet, despite requirements that federal cases be radomly assigned by lot.
At: https://translate.google.com/translate?sl=auto&tl=en&js=y&prev=_t&hl=en&ie=UTF-8&u=https%3A%2F%2Fwww.pagina12.com.ar%2F146753-cambiemos-y-el-dilema-del-desafuero&edit-text=
Congresswoman Aída Ayala and Macri during the 2015 campaign.
Ayala was convicted on Argentina's equivalent of RICO charges as head of a racketeering outfit run by three relatives.
Macri's "Let's Change" caucus has thus far refused to strip her of parliamentary immunity, as they have with an opposition congressman last year and are trying to do so with other opponents.
Swedish parties mull grand coalition as deadlock weighs
Sweden’s political deadlock is starting to loosen.
As formal talks enter a second week, Center Party leader Annie Lööf on Tuesday let it slip that she’s thinking about alternatives, should her first preference for a center-right Alliance government prove impossible.
“An Alliance government is our main focus,” she said after meeting with speaker Andreas Norlen. “If that doesn’t work there are many different possible solutions between the blocs. Even if I don’t think a grand coalition is the best alternative, it shouldn’t be excluded in a complicated parliamentary situation.’’
Such a grand coalition could include “one or more” of the Alliance parties and the Social Democrats, she said.
That will be welcome news for acting Prime Minister Stefan Löfven, who has been staking his claim on continued power in peeling off Lööf’s Center Party from the four-party Alliance. His red-green coalition would have a majority with the Center Party. Still, Lööf has said she won’t cooperate with the former communist Left Party, a key Löfven ally.
Her comments offer the first sliver of daylight in the political impasse created by the election three weeks ago. The vote saw Löfven’s Social Democratic-led bloc winning 144 seats to the opposition’s 143 seats, leaving both without a majority.
The nationalist Sweden Democrats emerged with 62 seats, effectively blocking any path to power. But the establishment parties have so far refused to work with the Sweden Democrats because of its neo-Nazi roots.
At: https://www.bloomberg.com/news/articles/2018-10-02/swedish-center-party-hints-at-grand-coalition-as-deadlock-weighs
Swedish Prime Minister Stefan Löfven makes a point to centrist alliance leader Ulf Kristersson (Moderate), Annie Lööf (Center), and Jan Björklund (Liberal) in Parliament.
Sweden's elections on September 9 resulted in deadlock, leading to grand coalition talks between Löfven's Social Democratic-led alliance (144 seats) and the Moderate Party-led opposition (143).
The grand coalition would be viable even without the 31 seats in Lööf's right-leaning Center Party, the most averse to the idea.
The neo-Nazi Swedish Democrats joined the opposition in a no-confidence vote against Löfven on September 25; but have been excluded from any possible future government.
Leon Lederman, Nobel Prize honoree who coined 'God Particle,' dies at 96
Leon Lederman, the U.S. physicist who won the Nobel Prize for co-discovering one of the universe’s subatomic building blocks before coining the term “God particle” to describe the mechanism that gives mass to matter, has died. He was 96.
He died Wednesday in Rexburg, Idaho, according to the website of the Fermi National Accelerator Laboratory in Batavia, Illinois, where he had once served as director.
Lederman shared the 1988 Nobel Prize in physics with Melvin Schwartz and Jack Steinberger for detecting the muon neutrino, a previously unknown member of the lepton family of particles. At Brookhaven National Laboratory on Long Island, New York, they used a high-energy accelerator to produce a beam of neutrinos, which can create muons and electrons on interaction with matter.
The discovery in 1962 helped build on the so-called Standard Model, which explains how subatomic components interact with invisible fields to gain mass. The model was complete when scientists at the European Organization for Nuclear Research announced in 2012 that they had detected the Higgs boson, named after U.K. physicist Peter Higgs.
“How can we have our colleagues in chemistry, medicine, and especially literature share with us, not the cleverness of our research, but the beauty of the intellectual edifice, of which our experiment is but one brick?” Lederman said in his Nobel banquet speech.
At: https://www.bloomberg.com/news/articles/2018-10-03/leon-lederman-nobelist-who-coined-god-particle-dies-at-96
Prof. Leon Lederman and friend
Greek crisis: US 'could have forced a haircut,' says former IMF deputy director for Europe
“The fundamental reason why the Greek crisis lasted so long was the extreme level of austerity that was imposed.” That is the verdict of Ashoka Mody, visiting professor in International Economic Policy at Princeton University, a former deputy director of the IMF’s European Department and one of the most eloquent critics of the policies of the troika in Greece and elsewhere.
What should the IMF have done?
“It should have insisted, it should have made the restructuring a condition of its participation,” Mody said, mentioning that the staff report all but admitted the debt was unsustainable and that Dominique Strauss-Kahn later said he was in favor of debt relief.
“The reason it didn’t happen was the ideological opposition of the European Central Bank – in this case supported by the US Treasury. Strauss-Kahn did not want to offend either the Americans or the Europeans.”
“The stance of the US Treasury was critical – if its representative on the Executive Board had come out in favor of a restructuring, it would have happened. Instead, it sided completely with the European viewpoint – the Treasury secretary, Tim Geithner, believed that there should never be a restructuring in the midst of a crisis.”
Mody is also critical of the reform mix: “A lot of the measures were about weakening labor. Here, too, there were many IMF studies showing what a terrible idea it is to cut wages during a recession. These, too, were ignored.”
At: http://www.ekathimerini.com/232253/article/ekathimerini/business/us-could-have-forced-a-haircut-says-former-imf-deputy-director-for-europe
Prof. Ashoka Mody, former deputy director of the International Monetary Fund’s European Department:
European Central Bank and U.S. Treasury opposition to debt restructuring under any circumstances prolonged the Greek crisis for nearly a decade, leading to depression and much lower long-term prospects for Greece.
Debt restructuring (2005) was highly successful in Argentina - but was sabotaged in 2014 by vulture fund lawsuits and a hostile (possibly bribed) Wall Street judge.
Charles Aznavour, enduring French singer of global fame, dies at 94
Source: New York Times
Charles Aznavour, one of France’s most celebrated singers of popular songs as well as a composer, film star and lifelong champion of the Armenian people, has died at his home in Mouriès, in southwestern France. He was 94.
His accomplishments were prodigious. He wrote, by his own estimate, more than 1,000 songs, for himself and for others, and sang them in French, Armenian, English, German, Italian, Spanish and Yiddish. By some estimates, he sold close to 200 million records and appeared in more than 60 films.
At an age when most performers have long retired from the footlights and the brutal, peripatetic life of an international star, Mr. Aznavour continued to range the world, singing his songs of love found and love lost to capacity audiences who knew most of his repertoire by heart.
“We live long, we Armenians,” he said. “I’m going to reach 100, and I’ll be working until I’m 90.”
Read more: https://www.nytimes.com/2018/10/01/obituaries/charles-aznavour-dead.html
Charles Aznavour, 1924-2018.
Argentines sacrifice vacations, internet and even food as economic crisis intensifies
Argentina, Latin America’s third-largest economy is being whipsawed by rising inflation and a plunge in its currency, the peso - hurting everyone from laborers who are getting less work to professionals facing credit card bills with soaring interest rates.
The turbulence is the result of several factors: unclear policies, a foreign debt crisis, and an increase in U.S. interest rates have led investors to pull out of Argentina and into safer U.S. bonds.
President Mauricio Macri came to power in 2015 promising to reverse 12 years of protectionist, free-spending policies enacted by the leftist governments of Néstor Kirchner and his widow, Cristina Fernández de Kirchner.
But cuts to subsidies have instead led to sharply higher utility bills and fares, feeding inflation which under Macri has averaged 35% - 10 points higher than under his predecessor - and may reach 50% this year.
Wages are meanwhile rising by just 20%.
Critics consider the utility hikes effectively a tax increase amounting to 6% or more from average incomes - while $4 billion a year were granted in corporate and high-end tax cuts.
The economy grew last year by 2.9%; but GDP fell 4.2% in the second quarter of 2018 compared with a year earlier. Unemployment rose in June to 9.6% - the highest in 12 years - and another 60,000 jobs were lost in July.
The peso has lost over half its value so far this year, from 19 to 42 per dollar.
This has pushed up gasoline prices by over 60% - which impacts the price of many products, especially food. Argentina also suffered its worst drought since 2009 earlier this year, crippling soy exports and putting further pressure on food prices.
Stuck in the middle
The drop in purchasing power has also hit the middle class, which represents about 40% of the country’s population and were until recently strongly supportive of Macri.
The shrinking peso has made it more expensive to buy imported goods such as smartphones, or to travel abroad. Foreign spending by Argentine nationals fell abruptly in June by 28% - a $300 million monthly savings for the central bank dwarfed by $3 billion in capital flight a month.
Some have coped by dropping their internet service or sharing it with neighbors, while others have postponed buying a new home or car and have opted for public transport.
Over 130,000 borrowers with adjustable-rate (UVA) mortages promoted by Macri in 2016, are now facing steep negative amortization (loss of equity) or outright foreclosure as both their installments and principal rise - a situation similar to the 1981-82 Circular 1050 mortgage crisis during the last dictatorship.
From plaudits to bailout
Macri's image as a market-friendly businessman meant that early in his administration there was an inflow of cash from foreign lenders, which helped cover rising budget and external deficits.
Argentina sold $133 billion in bonds in Macri's first two years - more than any emerging market except South Korea. Foreign investors stopped buying in January however, popping last year's carry-trade debt bubble - known locally as the financial bicycle - and leading to wave of capital flight.
The crisis forced Argentina to request a $50 billion IMF credit line in June - a bailout conditioned on steep budget cuts. These cuts, plus an interest rate hike to 60% in a bid to shore up the peso, have exacerbated the recession.
And the crisis is unlikely to ease in the near future: The new central bank head, Guido Sandleris, announced he would "restrict the monetary base to reduce demand for dollars to a minimum."
Similar scorched-earth monetary policies during past financial crises in Argentina have failed to tame the dollar.
Nora Pastrana, 45, says she voted for Macri and his right-wing coalition — known as Cambiemos, or “Let's Change.”
“He promised change,” Pastrana said, “but change failed.”
At: https://www.washingtonpost.com/world/the_americas/argentines-sacrifice-vacations-internet-and-even-food-as-economic-crisis-intensifies/2018/09/27/2fc10082-c01e-11e8-9f4f-a1b7af255aa5_story.html
Normally hectic Ninth of July Avenue at a near-standstill during a September 24th general strike - the fourth since Macri took office in 2015.
Macri has already spent the $15 billion IMF loan from June 22, mostly to cover capital flight by speculators.
"Our future is not in speculation and financial rackets," CTA labor federation head Pablo Micheli said. "That's for the loafers in the administration."
Senate Panel Approves Kavanaugh, but Flake Wants F.B.I Investigation Before Final Vote
Source: New York Times
The Senate Judiciary Committee voted along party lines on Friday to advance Judge Brett M. Kavanaugh's nomination to the full Senate, but in a dramatic reversal, Senator Jeff Flake of Arizona said he would not support final confirmation until the F.B.I. investigates accusations of sexual assault leveled against Judge Kavanaugh.
Mr. Flake, an Arizona Republican, had said in a statement Friday morning that he would vote to confirm Judge Kavanaugh, President Trump's Supreme Court nominee, less than 24 hours after a remarkable public hearing with a woman accusing him of sexual assault.
But after hushed negotiations with Democrats outside the hearing room, Mr. Flake, who is retiring at the end of the term, chose a different course. His decision threw the nomination into uncertainty just moments before the panel was set to vote.
“I think it would be proper to delay the floor vote for up to but not more than one week in order to let the F.B.I. to do an investigation limited in time and scope to the current allegations that are there,” he said.
Read more: https://www.nytimes.com/2018/09/28/us/politics/brett-kavanaugh-senate-judiciary.html
Arizona's Jeff Flake: Change of heart, or mere tactics?
IMF increases Argentina bailout package to $57 billion
The International Monetary Fund and Argentina announced Wednesday an arrangement to increase resources available to the South American country by $19 billion.
The agreement, pending IMF Executive Board approval, would bring the total amount available under the program to $57.1 billion by the end of 2021, up from the $50 billion secured on June 8.
Argentina's recession-laden economy is struggling under steep interest rates of 60% and a currency that has lost around 50% of its value against the dollar this year.
The governor of Argentina's Central Bank, Luis Caputo, resigned on Tuesday after taking the reins in June, the bank said in a statement - a surprise announcement for a country in the midst of talks with the IMF. The announcement sent the peso tumbling.
The agreement makes $14 billion available for borrowing for the remainder of 2018, rather than the planned $6 billion; and another $23 billion in 2019, rather than $12 billion - a $19 billion advance in total.
Macri has already spent nearly all the $15 billion drawn from the credit line on June 22 to prop up the peso, which has nevertheless lost half its value since Argentina's carry-trade debt bubble imploded in April.
At: https://www.cnbc.com/2018/09/26/imf-increases-argentina-bailout-package.html
Macri and the IMF's Christine Lagarde at an Atlantic Council (NATO) dinner in New York Monday night.
"I must confess I have a crush on Christine," Macri told attendees. "And soon all Argentines will be crushing on her too."
Argentine Central Bank president resigns; second in three months
Argentine Central Bank President Luis Caputo announced his resignation today - the second central banker to resign in three months.
The announcement comes amid the most severe financial crisis in Argentina since the 2001-02 collapse, which resulted in a then-record $82 billion bond default and massive unemployment.
Caputo, the seventh top economic official to resign in two years, will be replaced by Deputy Economy Minister Guido Sandleris.
Sandleris, 47, is a former academic with degrees from the London School of Economics and Columbia, where he received a PhD. in 2005.
His appointment was, however, met with skepticism due to his own record in government - mostly limited to serving as adviser under conservative President Fernando de la Rúa, who presided over the last collapse, and under Macri since the latter took office in late 2015.
The normally low-profile Sandleris is remembered for a March 1 interview in which he confidently predicted that "2018 will be better than 2017" and that inflation will be at most "19%" - a far cry from the 42% now projected by the central bank, or the 45-50% expected by most economists.
As of June, GDP was down 6.7% and unemployment had risen to 9.6% - the highest level in 12 years.
IMF talks
Sandleris has experience as a visiting researcher at the IMF - with whom President Mauricio Macri is currently in New York negotiating both an $18 billion advance and a $20 billion extension to the unprecedented, $50 billion credit line obtained on June 8.
Macri has already spent nearly all the $15 billion drawn from the credit line on June 22 to prop up the peso, which has nevertheless lost half its value since Argentina's carry-trade debt bubble imploded in April.
The dollar rose another 2.9% in Buenos Aires following today's news, to 39.28 pesos.
The carry-trade debt bubble, known locally as the financial bicycle, contributed to a doubling in the country's public foreign debt to nearly $200 billion in just three years and to renewed fears of a bond default.
The bubble's implosion led to the resignation of Macri's first central bank head, Federico Sturzenegger, in June.
Caputo - first cousin of President Macri's best friend - had been a controversial choice given his appearance in the Paradise Papers scandal last year and his personally profiting from the May devaluation.
Calls for him to resign intensified after he raised the central bank discount rate from 45% to 60% on August 30.
The rate, now the highest among all emerging markets, had been 27% as recently as April and has led to a wave of business bankruptcies and layoffs.
At: https://translate.google.com/translate?sl=auto&tl=en&js=y&prev=_t&hl=en&ie=UTF-8&u=https%3A%2F%2Fwww.eldestapeweb.com%2Fel-nuevo-presidente-del-banco-central-pasado-el-gobierno-la-alianza-y-el-fmi-n49683&edit-text=
Trading their poker faces for long ones, Guido Sandleris (right) and Sebastián Galiani (left) endure a recent press conference by Economy Minister Nicolás Dujovne.
Sandleris's appointment was met with skepticism by the markets, which expect few policy changes from Luis Caputo's disastrous three months as central banker.
$14 billion in reserves were lost under Caputo, forcing Macri to seek $38 billion in new IMF funds this week.
Fearing default, Argentina's Macri accepts $8.7 billion Chinese currency swap
The People's Bank of China reached an agreement with the Argentine Central Bank today to expand its 70 billion yuan ($10.3 billion) currency swap with Argentina by another 60 billion yuan ($8.7 billion).
The agreement - over twice the $4 billion swap announced on August 16 - comes amid a severe financial crisis in Argentina that has led to over $30 billion in capital flight so far this year and the worst recession since the last debt crisis in 2001-02.
As of June, GDP was down 6.7% and unemployment had risen to 9.6% - the highest level in 12 years.
Today's agreement was a needed financial as well as political boost for President Mauricio Macri, who has faced massive protests and calls to resign since a 2016-17 debt bubble imploded in April.
The carry-trade debt bubble, known locally as the financial bicycle, contributed to a doubling in the country's public foreign debt to nearly $200 billion and to renewed fears of a bond default.
Argentina's foreign exchange reserves have fallen $14 billion in the last three months as the Central Bank sells dollars to prop up the peso - which nevertheless fell from 20 to the dollar in April, to 39 currently.
Avoided by global bond markets since January, Macri has since tapped lenders of last resort such as the Bank for International Settlements and the vulture fund BlackRock ($2 billion each in May) - and in particular the IMF, which issued a $50 billion stand-by credit line on June 8.
Macri has already spent nearly all the $15 billion drawn from the IMF credit line on June 22, and is seeking both an $18 billion advance and a $20 billion extension to the credit line.
The IMF agreed in principle today to a extension of $3-5 billion - but as yet no cash advance.
Chinese two-step
The Chinese-Argentine currency swap was originally signed in 2014 by Macri's center-left predecessor, Cristina Fernández de Kirchner, when Argentina was shut out of credit markets after its bondholders were blocked from collecting payment by a New York judge seeking to pressure the country to pay vulture fund holdouts a 1600% return.
Macri, who sought closer ties with the U.S., condemned the swap, and after taking office in late 2015, paid vulture funds an estimated 1160% payout and distanced Argentina from the Asian giant.
He then ordered construction on two hydroelectric power plants and two nuclear power plants cancelled in 2016 - an 85% Chinese-financed $20 billion investment.
But after trade and currency deregulation led to the current account deficit doubling to $31 billion, Macri changed tack and in June 2017 signed a three-year renewal of the 2014 currency swap.
While China is already Argentina's second-largest trading partner, a record $7.7 billion deficit with China made up 90% of its merchandise trade deficit last year. The currency swaps have helped finance this shortfall.
At: https://translate.google.com/translate?hl=en&sl=es&tl=en&u=http%3A%2F%2Fwww.ambito.com%2F934601-bcra-renueva-swap-con-china-por-mas-de-us-10000-millones
Greeted in Beijing during a state visit last year, Argentina's Macri has recently sought closer ties with China after his own deregulatory policies plunged the country into its most severe crisis since 2002.
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