Fubarrio Expat Trader

Things are really moving faster than I have time to process and blog about it.

Big thing on deck is AIG — Huge liquidity problems. They’ve been downgraded by Moody’s and S&P.

I turn on CNBC and FIRST thing I see is an AIG ad….15/mo for 250k worth of coverage for someone 40 years old. You can tell I’m getting old — I’m actually thinking to myself — “hmm interesting”…then I hear the voice over — “and AIG is the company strong and stable enough so you KNOW they’ll be there when you need them most”

(that commercial must have been shot a while ago, huh?)

They cut to the show and all the daytime anchors have been pulled in for an evening session. These fools are everywhere on the show calling for the Fed to supply them with liquidity. These guys are an insurance company, right? This is getting a little ridiculous, but they are saying that they need something like $70B

CNBC at this point is begging for the govt to step in and save these guys. Another chapter in the u.s.s.a.

Gotta tell you, I would be SHOCKED if the markets are allowed to open tomorrow without some kind of intervention by the govt, or an institution backed by the govt.

We are VERY VERY close to an all out capitulation event — CNBC talking heads are up into the evening in the studio for the second straight night….VIX (volatility index) is shooting the moon — only two ways it goes — government saving rich people with taxpayers’ money OR market tanks.

I’m betting gov. save, and fed “suprise” rate cut.

We’ll see.

UruguayGuy

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LEH is BK

I had a short dated put on these clowns that I got “chickened out” of when gov/fed/treasury interventions sent the financials (lehman included) soaring.

What I “learned” was that shorting financial companies is very dangerous — they are experts at raising additional money and manipulating their share prices. In the longrun, there is no “free lunch” and physics will take over. The “problem” is, predicting when exactly rationality, truth, and accounting laws will be inforced is pretty difficult in this environment.

If you’re going to bet on one of these fools going down it’s best to catch them in a period of relative calm (when the implied volatilities are low) and buying long dated puts (LEAPs).

Of course, that’s not exactly 100% safe either. Witness what happened to Merril Lynch today. Bank of America came in and paid up a 70% premium to buy them out. This is baffling that you would pay such an absurd premium for a company that was going to be a single digit midget as soon as the shorts were done with Lehman and turned their sites on the next weakest link….Be interesting to see how many of the bad debts are backed by BAC and how many of them they attempt to foist off onto another organization

UruguayGuy

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ciao,
UruguayGuy

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(note: i tried to post this last night and blogger was f-ing up. so now you have one less day to act!)

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One of the more refreshing things about this latest trip to Peru is that they speak Spanish in Peru….As it turns out they speak it throughout MOST of latin america as well.

Although it’s been 20 years since I formally studied Spanish, I’ve managed to retain quite a bit — and subsquent exposure to the language has helped as well….living in California, couple of trips to costa rica, some visits to mexico, meeting a cab driver in taiwan who spoke spanish, etc.

Notice that I did NOT say, “Living in Uruguay” for the last 2+ years.

Now, granted, I work, and live, and think in English. This is NOT the stuff of Spanish language immersion

However, that said, I have managed to talk to a few Uruguayos since I arrived. While it’s clear that it is NOT English they are speaking, the only other thing that I’m sure of is that it is Spanish either!

Granted, they will tell you it’s Spanish, but to the uninitiated, the peculiarities of the “rio platense” “Spanish” they speak here is nearly unintelligible to my ears. As always, the less formal (more street/uneducated) the utterances the more bewildering for the foreigner.

So what makes the language they speak in this part of South America so hard to understand? Well, the following is a short list of the things I find the most bewildering

1.) probably the most obvious — and easiest to get used to is the pronounciation of “LL” and “Y” with the “sh” sound. in SPAIN it sounds a lot more like an english ‘y’

calle (street) is Ca-Ye in Spain
in Uruguay and Argentina it sounds like Ca-shjay — not sure my attempt at phonetics really help, but once you hear it you’ll know what i mean.

2.) slightly less obvious and a little harder to get used to is the “chopping” of the ’s’ sound. Pescado (fish) becomes “Pe’cado” — in cases where you are already vocab challenged this often makes you think you are hearing a new word (when it goes by too fast) and can confuse.

the lights went out in our apartment and we had to get the power company out to fix the meter at the street….a week later, our doorman, who hails from teh interior asked me:

“como esta la lu’ “? (how is the ‘lu’ )

huh?

“como esta la lu’ “?

(is he talking about the bathroom???)

so i finally ask, “que es ‘lu’? “

he clarifies, “luZ, luZ” (light)

oh…well, why didn’t he just use the Z the first time he asked?

3.) the most challenging thing for MOST speakers of spanish are that there are a LOT of verb conjugations and even subjects that don’t exist in English — making even more verb conjugations. On top of that there are a lot of “irregular” verbs — or verbs that don’t follow the rules of conjugation — and on top of that there are “tenses” that don’t exist in english either — like an “ongoing past” (used to be in some state for an extended period of time), and subjunctive (which i’m not even sure i can explain other than to say that it’s outcome is not certain yet).

Well this is compounded (dramatically for me) by the popular use of the noun “vos” here. In Spanish they already have two different ways to say “you” — Usted (is formal) and Tu (is more casual/familiar). Each of these, of course, conjugates all of the verbs around it differently.

So to make things more Challenging down here they decided to create another one called “vos” — which is basically MORE casual than “tu” — and of course it’s got it’s own set of conjugations….some of which i’ve eventually figured out — most of which baffle me to this day.

If one is moving here and wants to learn spanish with the intent of just living a more integrated life or working down here then doing some form of formal study here will probably help with the accent. I’m not sure if the formal schools will even teach vos and all of its conjugations of verbs….but having some friends and going out and chatting with them frequently will get you in the swing of things quickly….just don’t expect the rest of the world to undestand your funny accent very well

The bellhop in Lima was baffled as GL was asking him if they had “sherba” (roughly translated as tea) in Lima…after the third time she asked he finally decyphered it…ah, “Yerba” ….and confirmed that they had it.

The shocking thing for me was that I understood EVERYONE on the trip that spoke to me in Spanish. Had long long conversations with people who didn’t speak a lick of English….As soon as I got on the flight from Santiago back to Montevideo the stewardess came up and said something to us and I had to ask GL, “what did she say?”…. felt like home

adios,
UruguayGuy

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“All your GSE are Belong to Us!”

Good grief.

The only thing more disturbing than the corruption is apathy I guess. Fannie and Freddie were declared solvent and strong enough to stand on their own what — two months ago??

Interestingly, the Russians who wrote about the collapse of communism reported that those that did the best (mentally, emotionally) were often the most apathetic of the bunch. Those that thought they could make a difference and tried to “rally the troops” became the most despondant and had the most difficult time avoiding washin their mouths out with buckshot.

I refer to these after hours “news events” (announcements and frequent subsequent interventions) as “tape bombs” and “stick saves” — I can’t take credit for the genesis of these terms — just parroting them here in case you haven’t been exposed. The “stick saves” are coming with disturbing regularity anytime that markets approach or god-forbid pierce important technical levels on the downside. It’s almost like they are trying to “manage” (manipulate! cough) the markets on the way down.

It’s the reason that a huge portion of my retirement portfolio — the portion that i’m not allowed to play futures with — is in cash.

You see, if one only puts their money in the markets they are precluded from reacting to these “tape bombs” and “stick saves”.

The futures open on Sunday night and allow you to get out of the way of oncoming locomotives whether short or long….at the very least allow you to hedge off price movements in positions you can’t unwind while the market is closed.

I’ve been noticing a lot of “relative strength” in financials in the last couple of weeks. Friday, to those that were watching market internals closely ( i wasn’t ) it was obvious that a “fix was in”….the fannie/freddie weekend announcement was obviously known (or miraculously predicted) by some. I’m guessing the former, not the latter.

short term, this is likely to be very bullish for financials and us equities. what kind of damage this does to the country and the faith in our markets is anyone’s guess. i’m rapidly rounding apathy and heading directly for “cabin in woods” territory myself.

ciao,
Uruguay Guy

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At this point, I’m still listening to all the “warnings” about the altitude, so I’m diligently drinking my coca tea. We decided to have a nice quiet night relaxing at the hotel. I also tell the travel agent to bag the “city tour” the next day. We’ll check things out on our own.

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…. i didn’t really retain any of it. i just remember they had GOLD!

adios,

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The pictures are a little weak because the marine layer whites everything out on my camera. Trust me, it was a lot nicer than anything in MVD though. There was a nice/upscale Chinese AND Japanese restaurant, Tony Romas (lol), Hooters (lmfao), and a Dunkin Donuts (not laughing now — i ate lots of those )

There were also a number of local stores selling upscale baby alpaca “wool” items of clothing and some other stores geared towards the well-off Peruvian or Foreigner/Expat. The mall was quite crowded everytime we went there for to eat in our four days in Lima.

Ok…further adventures/details/and pics coming in the next installment.

UG

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This travel log is going to be different than many people who find this site via search engines, etc. will be expecting.

The reason?

While it’s written in English, this trip is originating from Montevideo, Uruguay — not North America.

Our trip began at Uruguay’s largest airport in the Carrasco neighborhood in the outskirts of Montevideo. Like all absurd airports they want you to show up a few hours early. If you have a few dollars, a *great* alternative to being sheep herded through duty free shops on the way to a very cramped and uncomfortable waiting area is to delay as long as possible and go “upstairs” in the airport.

Back by the area where they have cafe-style eating (which is pretty bad btw) there is a stairway that looks like it’s going to a private club/lounge room. It’s not. It’s just a restaurant available to the public and a very relaxing way to chill and have some overpriced (but totally worth it) food while waiting for your departure to get closer.

To leave the country you’ll need to pay 31 dollars per traveller (if holding a US passport). I’m not sure if this is the same for locals and residency holders.

A word of caution: when you go through the security in mvd — after enjoying a leisurely meal upstairs of course — the security check and another visa stamping line are “out of site”. So, it can be difficult to judge how long that line actually is.

Once our MVD flight was ready to board from its pathetic “departure lounge” we were spirited away by standing room only bus across the tarmac to the waiting plane. At the time of this writing we could see a rather large (for uy) and futuristic airport being constructed on the horizon.

While I’m sure some architect and construction company are thoroughly pleased with the contract that berthed this beohemouth — good god, there are only 3.5MM people in the entire country….and not that many of those can afford airtravel.

The scale and magnificence of the building seem a bit ambitious — but at least I know where part of my 62 dollars (departure tax X 2) is going.

Our trip was booked through LAN chile. It is a pretty nice airline by SA standards. Their only problem is they have the nasty habit of hubbing everything in Chile We were laid over en route and on our return in Santiago.

Santiago Airport

Once we arrived in Santiago we had a few hours to kill before our continuing flight to Lima Peru. We decided to eat in the airport since on a previous trip (from Hell) to Santiago I had been pleasantly suprised by a “Ruby Tuesday” in the airport.

In a nutshell, when you’ve been out of the US as long as us, it doesn’t take much. What it was was they had a cheddar based cheese sauce that they poured over some nachos.

Cheddar!

If you are living in the US, don’t take this gem for granted! For those of us who are vegetarians whereever practical — and some places not very practical — cheddar is a godsend. Alas, there is no cheddar in UY to speak of.

When we arrived in Santiago we walked the entire length of the airport looking for the elusive “Ruby Tuesday” — (for those of you not “in the know” Ruby Tuesday is a “casual dining” — meaning not that great — bar food type chain that seems to emenate from the southern states. it’s a rouge equivalent of chilis, bennigans, TGIF’s, etc etc etc)

We finally found Ruby Tuesday’s at the far end of the airport, and sat down to order. Unfortunately, I guess to keep their franchise license intact they have to run with the Ruby Tuesday decor and the Ruby Tuesday menus, etc. However, they’ve taken the strategic position of simply stocking and cooking those things that are convenient to get or the majority of people in south america order.

While they were bringing out sizzling fajita plates of all kinds, it seemed like all the different things I would order they were “all out” of that specialty. This took the zest out of my quest pretty quickly….I settled for a wilted salad bar and cheese fries — drowned in the same boring ass tasteless white cheese that i am already dreadfully sick and tired of eating in Uruguay.

I pawed around at that for a while and declared it a bust….considered a milkshake to salvage the experience, but of course they weren’t making those either.

All in all, while Ruby Tuesday’s was disappointing, this trip to Chile was much less painful than the last one where we were crazy enough to actually leave the airport. I considered that a victory.

After a couple hours of cooling our heels, our flight for Lima boarded and departed. This leg of the flight was *excellent*. LAN had jumped in the 21st century. Each seat-back — even back in “steerage” where we were — had seat back movie/game/tvshow/music etc. players. I watched a couple of different movies and GL was able to watch the new narnia movie and i wasn’t forced to be subjected to it (!) a total win-win if ever there was one.

We arrived in Lima and found what is probably the longest customs line I’ve ever seen. I was still in great spirits since the flight rocked….but it did wind back and forth for some time. Apparently, several flights had landed simultaneously.

We had opted NOT to check any luggage so once we were through the line, we proceeded quickly to the waiting area for arriving passengers….and this was my first impression of Peru….

Finally in Peru

I’m not sure how many people reading this have done extensive travelling outside of the US — or in Latin america in particular, but when you are ejected out of the customs area there is usually a gauntlet of people in the waiting area…a massive flood of humanity…usually restrained by some dainty velvet rope and a benign looking security guy with a walkie-talkie.

In the mix, so to speak, is all manner of family members, hired drivers, taxi-cabs without fares, tour guides seeking out their clients, tour guides without clients looking for suckers, and many many many people who make a living by selling to or fleecing tourists who are “fresh off the boat” (so to speak).

The resulting cacaphony is at times quite a bit to take in.

If you are looking for a loved one or are going to meet someone in this atmosphere, it can get crazier a.) the closer you get to the equator, and b.) the more homogenous the population appears to outsiders. c.) the larger the airport.

By these standards, the “crazy” factor at the Lima airport was about a 7 (on a scale of 1-10).

(By way of comparison, Seattle is a 2.5, MVD is a 3, San Francisco is a 3, Cabo San Lucas a 4.5, Mexico City a 5, Taipei a 5, San Jose Costa Rica a 5.5. Manila a 7.5, Beijing an 8, etc.)

Luckily I was able to quickly spy my name (mispelled) on one of the many signs being held up and waved around by the souls clustered around the exit….There were a LOT of people cluttered around the exit….on the positive side of things, they were fairly well behaved

The woman holding up the sign was our “tour guide” for Lima. This was new to me. When we have travelled in the past, it’s very frequent that we don’t even have a hotel arranged at our destination, much less a tour guide to take us there.

However, to reduce travel stress I had gladly turned over the travel planning to GL this time, and she had a arranged a package deal that included transport to/from hotels, and rooms with wireless internet throughout the trip — nice.

“Yolanda” and us waited for 15 minutes before another couple from MVD (of all places) emerged from customs and we were spirited off to the van that would take us through Lima’s night to our waiting hotels.

For all my impressions of Lima, our neighborhood, the hotel, etc….stay tuned.

ciao,
fuBarrio

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