This week’s new links & changes:
Gateway to South America
Will Bonner’s blog
Argentina report, Kathleen Peddicord
There are more than 1100 direct links to external websites on the BD Central external links page. This page is devoted to bringing site updates to your attention. If your site’s listed on the External links page, please let me know when you introduce new material. If it’s not listed and it should be, send me an email: bobdey@propbd.co.nz
18 August 2007:
Geoff McRae, ex-Bayleys in Auckland, popped up on my screen today from Buenos Aires, where it seems he moved 4 years ago, setting upGateway to South America: “Gateway was conceived back in 2003, when it became obvious to a number of intending investors that the assistance one takes for granted in most western countries was not readily available in South America. Because there is little consumer protection available to investors, the only safeguard they have is to choose the right professionals to deal with. Gateway has created a funnel that attracts foreign investors and introduces them to companies & professional individuals that
we believe will best serve the investors interests.” Mr McRae, president of the Gateway business and its sales & marketing director, started investing in Argentina 4 years ago buying residential & rural assets. Finding success, he more recently started introducing other New Zealand & English-speaking clients to the opportunity to also invest in South America.”
As usual, I arrived at the Gateway website by a circuitous route. It began when I opened my daily email from Daily Reckoning, the bearish finance & economic website created by Bill Bonner, a very international American (from Baltimore, lives in Paris, tried living in London, was early to invest in the coast of Nicaragua, now has a ranch up in the hills in the north-west of Argentina), who doesn’t believe the US Federal Reserve has been doing a remotely sensible job – creating a housing boom to stop the country going into recession, watching it get out of hand, and now taking panicky measures such as Friday’s ½% cut of the discount rate.
I’d just read 2 Fed releases before hitting the Daily Reckoning ramble. In the first, the Fed said: “Financial market conditions have deteriorated and tighter credit conditions & increased uncertainty have the potential to restrain economic growth going forward. In these circumstances, although recent data suggest that the economy has continued to expand at a moderate pace, the federal open market committee judges that the downside risks to growth have increased appreciably. The committee is monitoring the situation and is prepared to act as needed to mitigate the adverse effects on the economy arising from the disruptions in financial
markets.”
In the other release, the Fed said: “To promote the restoration of orderly conditions in financial markets, the Federal Reserve Board approved temporary changes to its primary credit discount window facility. The board approved a 50 basis point reduction in the primary credit rate to 5.75%, to narrow the spread between the primary credit rate and the Federal open market committee’s target federal funds rate to 50 basis points. The board is also announcing a change to the Reserve Banks’ usual practices to allow the provision of term financing for as long as 30 days, renewable by the borrower. These changes will remain in place until the Federal
Reserve determines that market liquidity has improved materially. These changes are designed to provide depositories with greater assurance about the cost & availability of funding. The Federal Reserve will continue to accept a broad range of collateral for discount window loans, including home mortgages & related assets. Existing collateral margins will be maintained.”This is scary stuff. At the Daily Reckoning newsletter, I got the kind of view I expect from that quarter: “As we point out in our soon-to-be released book, Mobs, messiahs & markets, every market is a public spectacle. And every public spectacle follows a certain pattern. It begins with lies & humbug “emergency” low lending rates from the Fed…faith-based currency…stocks for the long-run. Then, it progresses into farce hedge funds…low-doc mortgage loans…and “cove-lite” LBO financing. And finally, it ends in disaster.”
Then it ran to a TV interview with Dr Doom, Marc Faber, among whose comments was this: “What I noticed is investors are far more concerned to miss the next leg in the bull market on the upside, than about the risks of losing a lot of money. And I think, gradually this will change, and that will mean lower equity prices…and also prices of other assets such as commodities can go down substantially and obviously home prices around the world.”
Then Bill Bonner mentioned that his son, Will, was living in Buenos Aires but on holiday, and had made the 3-day trip to get to their back-of-beyond ranch. Some of the stories from these excursions have been fascinating, so on I read, hoping for some illustration…. In his blog, one of his most recent entries was about New Zealand farmers selling up here and investing in Uruguay. How did he come by this information? Well, one of his mates in Buenos Aires is Geoff McRae….
To gauge some of the changes occurring in Argentine markets, particularly in property, I’ve added on a link to the report by International Livingpublisher Kathleen Peddicord.
Websites: Gateway to South America
Will Bonner’s blog
Argentina report, Kathleen Peddicord
