Viva el cáncer!
– Graffiti that appeared on the walls of Buenos Aires as Evita Perón lay dying from cancer in 1951
We were happy to get back to São Paulo after a weekend in Rio de Janeiro.
By comparison, the neighborhood of São Paulo where we’ve been staying is clean, quiet and dignified. Rio is none of those things – especially on carnaval weekend.
And Rio is hot. Sweaty hot. Wilting hot. So hot you don’t want to leave the lobby of the Hotel Fasano.
We were not staying at the Fasano. Instead, we found an inexpensive room with a view – onto an airshaft. Our hotel was on Copacabana Beach. But you would never know it from inside the hotel. It could have been on the poor side of Chicago.
So, when we discovered the Fasano on nearby Ipanema we decamped for a few hours.
Copacabana and Ipanema beaches were crowded with bodies in various forms of indecency and decay. Young, old, fat, skinny, fetching and repulsive.
It was too much input for us. We were overwhelmed…
We left São Paulo yesterday to come to Buenos Aires.
We know Buenos Aires better than São Paulo. It is a prettier city. But less dynamic.
In São Paulo you see new buildings, new cars and new restaurants almost everywhere you look. Buenos Aires doesn’t change so much. It is an older city – more elegant and more timeworn.
It is also the capital of a country that is much smaller geographically, with an economy that has been in decline for more than half a century.
But what the porteños (people from Buenos Aires) lack in wealth and dynamism they more than make up for in conceit.
To make a long story short, the Italian proletariat discovered Buenos Aires in the early 20th century.
At the time, the city was so open… so free… so beautiful… and so bustling that an immigrant from Venice or Naples could get off the boat in the morning and have a job and an apartment by the afternoon.
The city had more trees than Paris… a bigger opera house… the widest avenue in the world.
But the Italians thought they could make it better by applying the latest creeds from Europe – syndicalism, communism, socialism and fascism.
Then in 1939, Juan Perón, a major in the Argentine army, was sent to Italy to study mountain warfare in the Italian Alps. He admired Mussolini’s fascist-socialist ideas so much he brought them back to Argentina with him.
Then Perón got lucky. He married Eva Duarte, who became the nation’s firstest lady ever.
“Evita,” as she became known, handed out presents to the poor on Christmas. Then she and her husband handed out passports to the Nazis – including Adolf Eichmann, aka Ricardo Klement, one of the key players in the Nazis’ “Final Solution.”
The Nazis were happy to immigrate, and no doubt showed the Argentines a thing or two about operating a police state.
Today, the Peronist party has a firm grip on power – relying on the urban working classes and slum dwellers for the votes it needs to stay in power.
“The story is always the same,” explains our local analyst.
“Politicians make promises to get elected. The promises cost more money than they have. They borrow. And they go broke about once every 10 years. The last crisis was in 2002. We’re overdue.”
In the interest of full disclosure, we’re not above taking advantage of people who do stupid things. After all, when Humpty Dumpty gets up on a wall, you should give him a push. Otherwise, how will he ever learn to stay on the ground?
So it was that we came to Argentina in 2005 on the hunch that there may be something worth seeing. In the event, we found a mountain ranch, which we were able to buy for a song.
There were three reasons the property was so inexpensive:
First, the nation had not yet recovered from its most recent crisis.
Second, there were no other buyers looking in the area of northwest Argentina.
Third, even at prices barely one-tenth of those in the US, it was still probably not worth what we paid for it.
So you see, Humpty Dumpty got the last laugh, after all. And the locals have been laughing ever since, as we puzzle over whatever made anyone think they could make a ranch work up in such barren, inaccessible and godforsaken country in the first place.
Poor Evita died in 1952. Then 57, Juan Perón took up with a girl, still a teenager, named Nelly Rivas. When asked how he could carry on an affair with a 13-year-old, he replied, “I’m not superstitious.”
|by Chris Hunter, Editor-in-Chief, Bonner & Partners|
On Friday, we promised to shed some more light on the Fed’s arcane bond-buying operations, aka “QE.”
Reader Larry O. wants clarification on last Thursday’s Diary, “The Strange Case of the Disappearing Debt.”
In particular, Larry wants to know what Bill means when he says that central banks will make government debt “vanish… as miraculously as the central bank funds created to buy it.”
It’s a great question…
One of the big questions surrounding QE has been whether the Fed will one day sell the bonds on its balance sheets back into the private market.
The concern is that this would flood the market with supply, pushing down bond prices and pushing up yields. (Bond yields move in the opposite direction to bond prices.)
But the Fed – now the largest holder of US Treasurys in the world – has the option of holding the bonds on its balance sheet to maturity.
It can then reinvest the maturing bonds into new issues.
Which is why Janet Yellen told reporters last October that shrinking the Fed’s balance sheet to normal historical levels “could take to the end of the decade.”
QE, in other words, is the gift that keeps on giving…