Under the Weather in Uruguay

Warning: From what I've seen....if you have any kind of chronic respiratory problems, you do NOT want to be here for the June through August time period. You WILL catch the flu (unless you have ZERO human contact) and I know a few people who've been coughing and hacking for well over a month already. The flu, coupled with respiratory problems to begin with, coupled with the cold, damp weather this time of year is pretty tough on those who aren't accustomed.

___________________

Winter in Uruguay is decidedly nicer than the winters I spent growing up in Washington state. While there are certainly days in Uruguay that can be as nasty as any western Washington winter, Uruguay doesn't tend to string 30 or 40 of these days in a row.

Interspersed with the dreadful, wet, cold days that put Golden Lotus and much of the rest of the country into "deep cover" are the wonderfully bright, sunny, temperate days that are in the majority of my pictures.

That said, if you were born, grew up in, or have become acustomed to a temperate climate I would try my best to avoid Uruguay from the second half of May until about the second week of September. As (i think) I wrote earlier, the entire country's buildings seem dreadfully underbuilt/underinsulated for the kind of weather that hits between these months. Depending on your situation you might find yourself with a chill that lasts about three months.

I know, some New Englander or Minnesotan is laughing right now...after all it doesn't even freeze here. But have you ever been poorly clothed, in the woods for an extended period of time (especially at night) and gotten wet? That's how I would equate the situation in Uruguay....It's like the homes and apartment buildings went out in a light cotton hoody when they should have brought their polar fleece and gortex.

ciao,

fuBarrio

Commercialism in Uruguay

I came home this evening to see that the street to my apartment was blocked off with road cones and they were shooting a commerical on the corner.

Sorry the pic isn't so great. Really didn't want to stick around until I got a nicely framed/focused shot. :)

ciao,

fuBarrio

:)

i've been trying to catch this guy walking these beagles for about 8 months. finally, found him on the street and just went up and asked him to hold still for a minute. not as cool as a "candid" but trying to catch those pooches in focus and in one frame was proving tough.

ciao,

fuBarrio

Sunshine and Strawberries in Uruguay

Some pics of Montevideo from July. When you see the sunshine and palm trees and your July is so warm in the northern hemisphere, it can be deceiving. Look closely at the digital thermometer in the third picture down. 2 degrees above freezing (celcius) in the middle of the day. ugh.

ciao,

fuBarrio

How's that CD looking Now?

OK...so, you read fuBarrio's chicken little, the sky really is falling proclamation and in fear you noticed that CD's and some treasuries had perked up to 5% returns.



Caution bein the better part of valor and all that, you decided to pack some away for a rainy day....Here's what has happened to the dollar in terms of its ability to buy other well traded currencies so far this year:




As you can see, if the dollar doesn't rebound, you will actually lose purchasing power this year on your CD or fixed income investment. I would go a step further to say that in terms of food and fuel and things you actually need and use, the real inflation in the dollar is bein masked in the USDX chart above by virtue of the fact that it is bein compared to other grossly inflating currencies.



As was discussed here, either the dollar, real estate, or BOTH will fall. I think we know which one of these three has happened by now.



In a bit of potential good news for the dollar, a good friend of mine who doesn't watch this stuff all that closely called me to discuss her concern over the fallin dollar. why is this good news? because either my brain washing is working, or the message that the dollar is a dead duck has filtered down to the masses. about the time these "known knowns" filter down to the masses in a meaningful way is about the time the trade is due for a countertrend rally. in other words maybe us long suffering dollar saving, dollar earning fools will get a short respite in our falling buck.



However, if you do get that respite, enjoy it. It won't last forever....maybe not even long. When I said last year "get your affairs in order" in regards to the dollar I was questioned, "who can predict the future?"



well, c'mon now....in retrospect was it really all that complicated or suprising?



ciao for now,

fuBarrio

A FUBAR'ed week in Review

well, the week began with a hopeful date -- 7-7-07 and then ended on a Friday the 13th. Gold ended the week up, at an even 666 and nat gas was 6.66.

it's enough to make superstitious traders like fuBarrio schizophrenic....if he believed in lucky numbers. however, the only "lucky" numbers in fuBarrio's twisted mind are the ones in fuBarrio's "gains" column, and the unlucky ones are in his "losses" column.

for the week in review i'd like to bring back some characters that you're probably gettin familiar with by now, and at least one that i don't talk about alot....

in this installment i'm goin to "say it with pictures"....then i'm gonna add a bunch of boring words that will confuse, distort, and mislead so that you don't think you can do this stuff without me! :)

i've spent a fair amount of time talking about momentum....favorable chart formations....not buying falling knives, not "top calling" things that are taking off, etc. i've even went so far as to document and dissect my stoopid trade of txm.v earlier this year. so let's revisit txm.v's chart:

as you can see, after a spectacular runup (that i caught a fair portion of) the stock cooled as Uranium hit 100/lb on the spot market. Although Uranium has continued to run up, the speculative furvor in junior miners cooled and a lot of people tooke money off the table. Around that time the predicted "unfavorable" period for miners started and TXM.V along with many other junior U miners went into a dive.

as the summer rolls on I am hoping to see a continuation of the "cup", a retest of highs, a slight pullback (smaller cup, aka handle) and a breakthrough of the highs on high volume the next time it retests the old high.

this has really been the hypothesis all year, however, the depth of the "cup" caught me offguard on txm.v and since i wasn't watchin the chart closely decided to impulse buy when it hit a target price i'd set in my head based on the "old" action.

so, you may ask, "if you're so sure that it'll retest and break through why not buy now?" well, i do hold some txm.v as a long term hold (not a trade right now), but for a true short term speculation buying at the time of breakout (some hypothesize) has a higher chance of returning greater gains over shorter periods.

when reading the economist style manuel this last week....ok, it was just the back cover....i noticed that it said not to brag when you were "right" it was "pedatntic" (?) (or some other big word i don't quite understand). frankly, i was just thrilled there was no negative comments about startin every other sentence with a lowercase letter and putting lots of "....'s" between independent clauses.

anyways, at the risk of bein pedantic here is the chart for glq.to which i showed a couple of weeks ago as being ready to breakout:

notice that it topped out at 4.18 on Friday, up over 39% in few days. if you were actually followin along it actually "gapped" up one of those days and after being up over 15 percent in a couple of days retraced to fill the gap before heading higher still. a more complete discussion of gaps, and filling gaps is worthy of another post....look for that later (or google it).

so, in reference to "why not buy txm.v as a trade now" in a big way....reference my third chart....

a couple of years ago i was buying goldcorp all the way up this big peak....unfortunately, just about the time that gold pulled back in may of '06, management pulled some really shady deals involving mergers/acquisitions and some potentially non-arms length transactions (in my mind).

i was stupid enough to buy some in my IRA in the mid thirties on the way down the back of this waterfall....there was no cup...no pullback...no retest of highs....and after touching 45 it is lucky to be in the high 20's well over a year later.

now, goldcorp is still in a potentially very lucrative industry. but, i don't trust management any further than i can throw them and it's been laziness and apathy (and a thankfully small position) that has kept me from sellin to date for another player....of course, i can't even get a tax loss out of it in my ira :)

it just goes to show, that after a big parabolic runup....a pullback can be a healthy consolidation....or the beginnings of a multiyear slide...it's hard to know until it's all over.

in case you're sick of looking at all these mining companies, you should check out sndk's multiyear chart. the reason i'm familiar is that by shear/dumb luck i caught a big runup in 2005 with a majority of my networth invested in LEAPs (long dated options).

since that big runup it has consolidated pretty heavily for a year and a half and seems to have wrung a lot of the speculative excess out of the trading/attention/ and volumes -- if by some miracle we can stay in a neutral to bullish US market long enough for sandisk to complete it's basing....when that stock runs it can mint you big money.

ciao for now,
fuBarrio

"I Blame the Public Education System"

To be fair, the public education system is "free" (paid for with footballers' taxes, ha ha ha) for all residents of Uruguay through PhD/MD, etc.

Since the govt has taken it on itself to educate the people I found the picture above I took on the way to work mildly amusing this a.m.

To those that don't speak Spanish, the following says, "738 for our government". If you're wondering what 738 means, the nearest i can make out is that it's like a subgroup of the ruling party (think like "teamsters local 39484") -- only problem, "nuestro" is mispelled "Nustro" :)

Of course, given that I haven't used my spellchecker once since starting this blog, and in my last entry i called "fubies" a "fubbies" maybe those who live in glass houses shouldn't find such humor in honest mistakes :)

Coolio,

fuBarrio

First Ever "Fubbies"!

The last few weeks I've been looking around as time permits at some other Uruguay bloggers' work.

Ack!....Humbling I guess is about all I can say.

When I was first trying to research Uruguay in late 2005/early 2006 there really was very little in the way of information (especially in English and/or written from a Northerner's perspective).

I found a few random comments about ciudad vieja being packed with prostitutes (not especially so), cab travel being expensive (depends heavily on your version of "expensive" -- my 10 minute cab ride to work is 3 dollars) and Uruguay being a little bit boring (ok, 1 out of 3).

After arriving and discovering (being shown) the Southron's seminal blog, many others have either become known to me or sprouted up around the same time.

I'm going give a "shout out" to a few newer blogs (well newer to me) which I haven't talked about a lot here in the hopes that you can visit them and get something out of them. God knows, I don't have the energy or talent to write as completely and informatively as these bloggers. So, here is to hoping that there blogs will pick up where I've obviously "left off".

So, without further adieu, the first three "Fubbie" award winners!

Brazzie's Blog
Chuck Stull's Blog
Urufish's Blog

There are many others as well....These three blog's however blow me away in their depth and value and I haven't/don't talk about them enough. If for some reason you stumbled onto my blog and would like to know more about Uruguay and less about Uranium Miners (or whatever the Hell else I'm bloggin about) check these three out.

Ciao,
fuBarrio

muhuhuhuhwahahahahahaha!!!

Wow....Uruguayan footballers are threatening to strike the new income tax....

This place gets more and more like the U.S. every day...Self important professional sports stars, and people with entitlement issues. Follow the link and get a load of the quotes.

http://www.uruguaydailynews.com/2007/07/09/footballers-may-strike-against-new-income-tax/

priceless.

ciao,
fuBarrio

glq.to part II

A Note about Commercialism on fuBarrio.com

Some of you may have noticed that my writing, while more frequently lately, isn't really full of the same rage and indignation that typically fuels my twinkie-filled meglamanical rants.

And yet, I seem to be post more often....Some kind of irrefutable proof that less *is* more?

Well, you may have also noticed that there are a bewildering number links, like the Benefits of Offshore Banking which really don't go into any great general detail about the "benefits of offshore banking" (yet). They are really links to sites that fuBarrio has a commercial interest in! (gasp!) "The horror (whore) or it all!"

Before you think that I'm trying to convince my Uruguayan readers to do business with my Banking compatriates (when we are forbidden to do by law) or trying to get my stateside readers to order OdeFusion authentic asian food in Montevideo, the reality is easier to explain -- and yet, no less sinister and mercenary!!! :)

Google has the interesting "issues" where its algorithm will weight a link with search terms in that link from a "trusted" site before it will a new site. So, effectively, I'm often times just tryin to get some new pages to index and link in the google (or other lesser) search engines for a search term that I feel accurately describes my website.

So, when you see things that look like blatant attempts to lure my 3 readers into a commercial relationship with fuBarrio, that's not exactly it.....though no less blatantly commerical! :)

ciao for now,
fuBarrio

GLQ.TO

just a quick note. Base metals are supposed to be dead again, right?

global copper, for whatever reason, looks like it is retesting its highs.

this looks a little bit like a cup and handle to me....however, one can't be sure until it breaks through that resistance to new highs....a pretty bullish sign for a speculative miner with the rest of the market looking so scary/wobbly/high.

ciao,

fuBarrio

The Tax-man Cometh....to Uruguay

What? I almost forgot some really big Uruguay News. Of course, not being total political nincompoops (sp?) the Uruguayan politicos lowered the VAT a "trifle" on some goods FIRST as a tradeoff for collecting an income tax.

One of the really nice things about being an Uruguayan citizen and resident - no personal income tax - is going away. It promises to encourage more gray-market activities, compliance headaches (especially for the small entrepreneurial business person) and expensive and complicated machination to avoid income taxes by many....

In case you are wondering "what kind of complicated machinations, fuBarrio?", have a look at some of the links on my sidebar.

Of course, the company I work for is licensed in Uruguay to deal with foreigners money, and as such, are precluded from taking on Uruguayans as clients.

Don't know if any studies have been done on this, but it seems that a quasi-socialist state like Uruguay attempts to level the playing field....But in order to do so, they believe, requires taxing income of ordinary working citizens.

Therefore, the very smart, wily, rich (enough to afford good tax advice), and of course the unscrupulous who just ignore or break the law, aren't effected. The "law abiding" middle class that hasn't enough money to pay for good/expensive advice and offshore vehicles pays a majority of the tax burden. The end result is a group of very wealthy tax avoiders who take more from the public trough -- which manifests itself in the form of access and political or economic "favors", and a bunch of formerly middle class citizens wonderin why it's harder and harder to keep up.

So in the end, perhaps the attempt at providing a social saftety net for the poorest of the poor creates a bifurcated social strata where only the super rich and the strugglin to pretend they are middle class survive.

Sound like any other countries we know?

ciao,
fuBarrio

"It's a 'Veterinario' Restaurant!"

Uruguayans love their animals.

Usually with a little bit of salt, slow cooked over a wood fire...har har har....

When I first arrived in Montevideo I spent the first 3 months or so in a deperate search for a vegetarian restaurant that had somehow escaped the discovery of any of the other bloggers.

Of course, veternarian offices are more common than mini-marts in the US, so everywhere I would go, I would catch a glimpse of a sign that said, "Veterinario" and for a fleeting instant hope it was a restaurant...HA!...maybe in Korea. I'd think I'd found the source of deep-fried tofu and Qorn "naked cutletts" -- Only to find it was just another vet's office when inspected closer.

Here at the office we have a couple of established dogs that terrorize the neighborhood by barking at each and every living being that dares walk across the front of the home anywhere between our sidewalk and the river, a good 75 meters away.

We have a new dog in the office these days. Luna, pictured above, is Santiago's beloved yellow lab puppy. She is amazingly cute in everything she does. And, it's a good thing because despite great progress, her house training still leaves a little bit to be desired. My coworker calls her a cute "poopy" - a latin mispronunciation of puppy, but apropos in this case. (As an aside, in case you've never been to montevideo or haven't read much, the sidewalks are covered in the evidence of Uruguayos love for their pets and their disdain for cleaning up after them).

If you come to Montevideo, bring your love of dogs. But, leave behind your hope for a good vegetarian restaurant. The only meaningful exceptions to this are the Italian Restaurants (and pick and choose off the menu, or OdeFusion's Montevideo Vegetarian Food. Luckily, I have a connection at OdeFusion. :)

ciao for now,

fuBarrio

Old School Hoops in Uruguay

I mentioned in a blog entry over a week ago that I was going to play some basketball with some locals and a couple of expat friends.

Club "trouville" was the location (which I'd never visited before) in the neighborhood of "Pocitos". Trouville is also the name of a restaurant/bar and another pizza restaurant in another part of town.

Finding the location was a bit challenging (turned out to be next to the restaurant of same name) as it was set back off the street and the entrance was sheilded by a construction zone.

Club trouville was an "indoor" gym, meaning that there was a roof and walls, but it was a cavernous building (unheated) and as such the ambiant temperature in the gym was just above the level where ones breath is visible.

When I arrived I was greeted by one of my expatriate friends who mentioned to me, "from what I've seen, this is going to be 'old man fundamental' basketball."

Just as well with me...since working during the weekdays my health has taken a turn for the worse, and the thought of weazing up and down the court in the cold air was a bit concerning.

Almost immediately after that some of the Uruguayos came up and introduced themselves...It turns out at least one of them was *really* old (71!) but didn't look it....We played pickup ball, full-court, by 2's to 10. It took me about 3 games to figure out that 3 pointers counted as 2 (like I said, "old school" :) )

I managed to escape thoroughly old schooled and embarrassed several times by guys almost twice my age, but without injury....It turns out at least one of the older guys was a member of the 1956 Olympics team that secured the bronze medal....Hall of Famers Bill Russell and KC Jones led the US team to the Gold that year.

I felt a little bit better after learning that. I knew I had pitiful fitness and my basketball skills (which never were much good) were really rusty, but I was beginning to think that Cocoon 3 was being filmed or something.

ciao,

fuBarrio

Montevideo, Uruguay feria

A couple of shots that I thought looked "pretty" that Golden Lotus took at the Nuevo Pocitos "ferria". Basically (if i'm spelling it right - it turns out i wasn't it's "feria"). A feria is a street market. During the week, various neighborhoods have them to sell honey, eggs, cheese, fruits and veggies....think "farmer's market".

On the weekend, the bigger ferrias have farmers markets combined with crapfest flea markets.

ciao,
fuBarrio

"Duck!"

Ok. I admit it. I'm amazed by Hollywood.

How exactly does the action movie star *know* that the faint whining in the distance is really an 18 wheeler, out of control, about to crash into the side of a lingerie store that he and his fiancee are casually shopping in.....or that the glint of light across the street on the rooftop is actually the reflection of a careless assasins rifle scope?

It seems like the first couple of times you tackled your friends and family taking them out of "harm's way" in a false alarm it would start to get *really* annoying...."oops, sorry" as you help your loved one to her feet, dust yourselves off and sheepishly try to right the wunderbra display.

Ok...with all those caveats....

"DUCK!"

I don't know how much or how well the mainstream media is reporting or explaining what is going on in the mortgage credit markets right now....so here is my 10 second synopsis:

Lots of dudes have borrowed lots of money in a leverage way.
To borrow that money they had to have "collateral".
They pledged as collateral something that doesn't trade in the open market and is hard to appropriately value.
Chances are, if the true value were known, they would have to come up with extra money for collateral that they don't have.
But, luckily, they haven't been forced to admit what the true value is because these things don't trade very often. They can continue to pretend they are solvent.
However, there is a *chance* that someone could be forced to sell SOON and admit the true value.

The result will be a wave of repricings rippling through an overleveraged market....(yeah, there really isn't anything new out there, is there?)

So, what's the chances that I'll be sheepishly helping you to your feet and straightening your clothes after another false alarm?

Who knows.

However, this is really what I've been predicting since starting the blog....a credit crunch due to malinvestment in absurdly overpriced residential real estate leads to a big-time credit crunch and/or big inflation as the powers that be try to save the market.

If the "powers that be" manage to paper over the damage, it's just a stop-gap. The bill has to be paid by someone/somewhere....and it's much to big to be done without damaging someone somewhere.....if the damn doesn't break right here, right now, i'd be VERY suprised to see us get all the way to the end of the year so all these overpaid hacks can get their ridiculous bonus packages.

It will either be taken on the chin by the private sector - the very people that have been profiting grossly from this very boom, or it will be paid for with tax dollars in an outright bailout, or in a stealthtax by the Federal Reserve printing more money for the debacle and inflating away all the wealth that you've accumulated with your hard work up until now.

Can you guess what I'm predicting? (hint: see my earlier post entitled 'privatizing benefits and socializing risk').

Isn't it Great?

Now, if only being "right" paid as well as being "smart" and just gorging oneself at the trough until they take it away.....sigh...I really didn't learn *anything* from the dot-com debacle, did I?

ciao,
fuBarrio

Under the Weather in Montevideo, Uruguay

I've made some references to the fact that it is winter(y) here. Here are a few snaps to give you a feel back in the northern hemisphere where i'm sure it's all "sunshine and strawberries" right now : )

Take a look at the two pics below. I tried to take the pic from the same location that this one below was taken to give you a "compare and contrast" from a couple of months ago....yikes.

ciao for now,

fuBarrio

BROUracracy in Uruguay

Banco de la Republica Oriental de Uruguay, better known as BROU is the big government bank here in Uruguay. If your visceral reaction to the sentence above doesn't conjure up visions of machine like efficiency you would be correct. I had the extremely eye-opening experience of going to downtown Montevideo in an attempt to open a local account here.

If you know fuBarrio's disdain for beauracracy, you might ask why he would subject himself to a banking relationship with an institution that so clearly places no value on its clients' time. Well, opening a non-resident account in many countries is difficult or next to impossible, but when trying to find local banking here I found that opening an account in Uruguay even as a resident was very difficult.

In fact on more than a couple of occasions I was told by large Northern hemisphere banks -- ABN Amro, Bank Boston, and Citi bank that they couldn't do anything for me once they found out that I held a US passport.

The more I asked around, the clearer it became that I was really limited as a US citizen to one of a few banks....Big govt sponsored Uruguayan banks, an Israeli bank (that had blown up during the currency crisis) and possibly Lloyds Bank TSB (which incidentally called and mailed docs to my apartment asking for my banking business). I'm not sure who told them:

a.) who i was
b.) i was looking for banking
c.) where i lived, and
d.) my phone number
....but it was an impressive marketing push.

In the end, for a number of ill-fated reasons, I dropped my resistance to opening an account with BROU (aka "Banco Republica").

....to be continued....

ciao for now,
fuBarrio

The Panic of '07

The news coming out of New York is that a large investment house lent their name to two hedge funds that now find themselves in trouble with losses from the subprime mortgage market derivatives. Merril Lynch (one of the creditors) is looking for blood, and Blackstone is trying to broker a peace deal between the two (at least long enough to float their IPO on the unsuspecting public)

Back to the Future

The Panic of '07, a financial crisis in the US, would also become known as the "Bankers' Panic".

In March '07, over-expansion and poor speculation led to a small crash. Money became extremely tight. A second crash occurred in October '07. The market falls nearly 50% from its '06 prices, the economy is in recession, and there are numerous runs on banks and financial institutions.

The primary cause of the crash is attributed to a retraction of easy credit terms...starting in New York with some big banks and quickly spreading across the country leading to bank and business closures.

To bring relief to the situation, the US Secretary of the Treasury earmarked Federal money to quell the storm. Complete ruin of the national economy was averted when powerful banking interests step in to meet the crisis, redirecting money between banks, securing international lines of credit, and propping up prices by buying the securities of selected institutuions.

However, this assistance doesn't come without a cost. The banking interests use their additional political influence to push a bill through congress which just failed one year prior to the panic. The new bill creates a public private partnership and institution for averting excesses in credit creation and backing financial institutions for the stated purpose of advancing stability and ensuring that a panic like '07 is never replayed.

Notice anything funny about this "prediction"?

Actually everything under the heading "back to the future" is actually about 1907...rather than 2007.

The US Congress passed the Aldrich-Vreeland Act which established the National Monetary Commission to investigate the panic and to propose legislation to regulate banking. In 1913, the commission recommended the adoption of the Federal Reserve Act, which mandated the creation of a central banking system to dampen the effects of future panics.

Yeah....uh...ever heard of the Great Depression or the "law of unintended consequences"?

Ciao for now,
fuBarrio