27 December 2006

What a day

First this...
Dying sun
And then this:

And that was only the weather...

Today's news in Rosario is that the provincial government will raise all public workers' salaries to a minimum of 1,000 pesos (~330 U.S. dollars), presumably with the corresponding increase for higher salaries as well, and the proportion of our salaries that do not contribute to our pension funds and the like will be reduced. This was ostensibly to calm down the teachers, some of whom were getting less than AR$1,000, and get them not to go on strike at the beginning of school period 2007; I find it difficult since Santa Fe's teachers have always gone on strike asking for higher salaries every year since I learn to write mamá (it was my mom who taught me), no matter what their real salary is, and no matter that they've returned from long vacations in Mar del Plata.

Today's news in Argentina also has to do with money, but with money lost instead of gained. The Supreme Court, after exactly 1,850 days, has decreed that the corralito and the subsequent "peso-ification" of U.S.-denominated bank accounts at a fixed rate of AR$1.40 to US$1, two desperate measures taken in 2001 and 2002 to avoid a massive loss of foreign currency reserves and a huge inflation spike, were not unconstitutional. People's savings in dollars were trapped back then so they couldn't withdraw them and send them abroad and/or hastily convert them to pesos producing a catastrophic hyperdepreciation and a hyperinflation. You could get your savings only in pesos, only in small amounts, and the exchange rate was fixed by the government at 1.4 to 1, even as the dollar was already much above that (it reached AR$3.8 per unit) . Much later, the banks were given orders to allow the free withdrawal of pesos, valued at 1.4 per 1 dollar, plus an additional amount given by a coefficient called CER, which includes inflation. The Court has now decreed that the savings holders must be paid AR$1.4 per US$1 + CER + an additional 4% of interest, which nicely rounds up to AR$3 and small change, coincidentally the current exchange rate to the dollar in the free market. Thus, the Justices said speculating on whether the peso-ification was legal or not is abstract and useless -- problem solved.

To many people who said that these measures were horrible violations of the property right and of basic legal principles, the Court replied that it was OK because it was an emergency... I'll tell why I think this is basically correct another day.

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