Wow Peso up a bit

sloopskipper says on May 6, 2008, 07:47:

Why do you find that good news, and for whom?

Simon says on May 6, 2008, 09:26:

It's good new for COLOMBIANS! GO PESO!!!!!!!!

"You want to talk to God? Let's go see him together, I've got nothing better to do."---Indiana Jones (Raiders of the Lost Ark)

morphus says on May 6, 2008, 09:32:

Why is it good for Colombians? Colombians are still making the same crappy wages. Everything in Colombia is still priced in COP too.

Frank Rizzo says on May 6, 2008, 09:46:

I don't see how this helps Colombians either... morphus.... it definately trickles down...right on the heads of the common workers.

Simon says on May 6, 2008, 09:49:

It's good for Colombian importers and Colombian tourists. It's definitely not good for sex-tourist, foreign losers who have to come to Colombia to get laid!

"You want to talk to God? Let's go see him together, I've got nothing better to do."---Indiana Jones (Raiders of the Lost Ark)

pedro says on May 6, 2008, 09:53:

Hmm Simon, well if we're talking in those terms, I guess you would be called a broke ass campesino who has to come to the US just to find a job.

Simon, how many times per week do you get called "beaner" and mistaken for a Mexican?

¡save pow wow!

Frank Rizzo says on May 6, 2008, 09:55:

Hi Simon...well i can see your point in that colombian importers can buy cheaper in the states and ship down (probably also paying in dollars for shipping)...and increase their profit there.

But, the colombian exporters would get hit hard, so would the common workers i'm guessing.

Simon says on May 6, 2008, 09:57:

None, because there's no Mexicans where I live.

Pedro, how many times did you fok a kangaroo before discovering you could just buy it from young, impoverished Colombian girls?

"You want to talk to God? Let's go see him together, I've got nothing better to do."---Indiana Jones (Raiders of the Lost Ark)

pedro says on May 6, 2008, 10:04:

Simon, did you not get called a beaner even one time while living in the US? How many times?

Do people ever approach you and offer you construction or lawn mowing work?

¡save pow wow!

kat1 (Moderator) says on May 6, 2008, 10:05:

Simon good for Colombians who can afford to go abroad, but not the poor Colombians, many of them receive help from abroad and with the peso being so high is less and less that they are getting.

export is another problem, to buy in Colombia will become more expensive so people will go somewhere else.
there is a bad and good side of this.

morphus says on May 6, 2008, 10:06:

Imports? Not much benefit there either. Importers won't be sharing profits the with the majority of Colombians. Electronics and computers still remain overpriced in Colombia. Plus, Colombians spend most of their salary on survival and keeping a roof over their heads anyway.

Anyway, the dollar will bounce back up to 3000 next year despite what all the gurus are saying on here....visions of a great depression in the U.S....soup kitchens...homelessness in the US.....HA HA! DOUBLE HA HA!

Simon says on May 6, 2008, 10:20:

Kat, maybe it's about time some Colombians stopped depending so much on those who live abroad. I've heard of cases of some lazy fokin people who have even stopped working altogether because they are just fine living on what their hard-working relatives in the US send them.

"You want to talk to God? Let's go see him together, I've got nothing better to do."---Indiana Jones (Raiders of the Lost Ark)

Alma del Norte says on May 6, 2008, 10:31:

Come back to Colombia and start importing cheap yanqui chit, and then you can go to the US on holiday and spend your Pesos.

darkangel305 says on May 6, 2008, 10:41:

kat1 says on Tuesday May 6th, 2008 10:05:

good for Colombians who can afford to go abroad, but not the poor Colombians, many of them receive help from abroad and with the peso being so high is less and less that they are getting.

EXACTLY!!!!!

sloopskipper says on May 6, 2008, 10:51:

Simon says on Tuesday May 6th, 2008 9:49:

"It's good for Colombian importers and Colombian tourists. It's definitely not good for sex-tourist, foreign losers who have to come to Colombia to get laid!"

What is more important for the country and provides more employment:
imports, Colombian tourism abroad, or exports?

And what hurts exports? Maybe a rising COP?

kat1 (Moderator) says on May 6, 2008, 10:54:

this happened to the UK a few years ago the pound went very strong, good for us, we could go anywhere in the world and it was cheap! but this started to hurt the UK economic, specially the tourist industry, to come to the UK was too expensive, people rather went to Spain or France.

caligula says on May 6, 2008, 10:54:

Morphus, Where do you get the indication that the peso will go up to 3000? just outta curiosity

morphus says on May 6, 2008, 11:03:

A weak dollar is the best cure for a weak dollar :)

Rubito says on May 6, 2008, 11:06:

Actually the price of electronics in COlombia has PLUMMETED in the past few years. Some of the deals are better than what I can get here.

---Violence is the price of freedom.---

DodgerDogs says on May 6, 2008, 12:25:

Simon: Do not let a aussie get you riled up, as those blokes are the punks of the world.

Our lives begin to end the day we become silent about things that matter.Martin Luther King:

jh816 says on May 6, 2008, 17:16:

The peso strength IS good for importers. Not only has the price of tech stuff come down quite a bit in the last year (check out LCD tvs), but many companies are also updating their equipment. El Colombiano had an article Thursday of last week, imports of heavy machinery and capital equipment are skyrocketing.

sloopskipper says on May 6, 2008, 17:33:

jh816 says on Tuesday May 6th, 2008 17:16:

"The peso strength IS good for importers. Not only has the price of tech stuff come down quite a bit in the last year (check out LCD tvs), but many companies are also updating their equipment. El Colombiano had an article Thursday of last week, imports of heavy machinery and capital equipment are skyrocketing."

That all sounds good, but how does that really help the Colombian economy, and the workers?

I suspect that being able to buy a big screen TV cheaper might not be high on the priorities of a poor Colombian trying to support his family.

How about the increasing prices for exports?

jh816 says on May 6, 2008, 17:43:

If we can finally get some decent capital equipment then we can improve productivity instead of being the one of the worst ranked countries in latin america in productivity terms.

Also, tech stuff is only an example of commonly imported products. Even the poorer part of the population buys something imported.

jh816 says on May 6, 2008, 17:49:

Regardless of who is helped or hurt by the strength in the Peso, unless it is a drastic and unforseen change, the government should not intervene. Changing economic policy to weaken the peso (ie, capital controls on foreign investment is only going to deprive Colombia of the economic momentum it has. Instead, they should be addressing the real issue, why can't Colombian companies compete when the peso strengthens?

sloopskipper says on May 6, 2008, 18:00:

Because their prices increase and they become less competative in the World's markets.

And that is part of the government's role.

jh816 says on May 6, 2008, 18:16:

The government's, through the central bank, role is inflation control and employment.

By increasing controls on foreign direct investment, they are hurting employment. Yeah, less fdi may weaken the peso and help the export sector but this is an indirect relationship. FDI has a direct relationship with employment, and is more likely to create jobs.

The inflation problem has less to do with the peso revaluation and more to do with global commodity prices. Besides, as you pointed out, the average colombian isn't buying the big screen tv. Their canasta of daily goods is mostly colombian made and has less to do with strength in the peso.

As far as becoming less competitive in the global market, that's globalization. Part of global trade is hedging your currency risk and continuously improving your product and processes to avoid problems like they are having. Check the World Bank figures. Colombian companies have done very little to increase productivity over the last 5 years and the rest of the world is passing them by. There are structural and cultural issues that need to be addressed or the Colombian exporter will be hurting even more than they are now.

OneHappyBoy says on May 6, 2008, 18:31:

yes, it is only intrinsically good for Colombians that buy imports, If interest rates don't rise with the falling peso, then is bad for the ordinary Colombian trying to salt away a few COPS...Thats the problem the US is facing... Its bad for the COL economy though, since petrol is now Colombia's biggest export and the US is its biggest customer.you want the paso to stay steady while the dollar falls off the cliff, then Colombia wins, (given that the next president has a strong dollar policy)

Words are just words. nothing more or less, but eloquently expressed, like a symphony to Beethoven's ear, no army can defeat and no oppression can exist.

jh816 says on May 6, 2008, 18:37:

It is good for the Col economy. Oil is priced in dollars, not only does a weak dollar drive the price of oil up to keep relative value, but investors flock to the commodity as a safe haven.

When we talk about importers, we are not only talking about Juan and Maria from down the block. We are talking companies that import their computers, capital equipment, whatever. They are now able to update their equipment at a much lower cost because import prices have come down

"you want the paso to stay steady while the dollar falls off the cliff" sorry this doesn't make much sense. If the dollar falls, the peso will strengthen relative to the dollar. It is just the other side of the same transaction

BillBigD says on May 6, 2008, 19:22:

Ending Rate today $1773.3750

darkangel305 says on May 6, 2008, 19:27:

eltiempo.com says $1.756,25
why they different?

BillBigD says on May 6, 2008, 19:34:

Dark-I took it off Bloomberg. That was the rate on Monday roughly. I could be wrong

jh816 says on May 6, 2008, 20:16:

Some of the sources lag a day and aren't very dependable. Usually reuters, bloomberg, or yahoo are pretty dependable for quickly-revised rates though yahoo's charts are not to be trusted

BillBigD says on May 7, 2008, 07:38:

1784.7500 Right now

rocinante says on May 7, 2008, 11:55:

"The [Colombian] government said it will use derivative contracts to convert as much as $2 billion in international debt to peso obligations to take advantage of a five-year rally in the currency. Finance Minister Oscar Ivan Zuluaga said the government will buy dollars from banks when the multilateral debt matures.

The peso dropped 0.6 percent to 1,766.6 per dollar. [as of earlier today - close still pending]

The yield on Colombia's benchmark 11 percent bonds due July 2020 rose 3 basis points to 10.96 percent, according to Colombia's stock exchange."

http://www.bloomberg.com/apps/news?pid=20602096&sid=a5UD.AG.Mldg&refer....

When the US Dollar gains because of news such as the above it's a good thing. Today is a good day to go to the ATM.

"World economic indicators point to a democrat winning 2008. It will surely be Obama. Peso 1400 by November" Feb 5, 2008

Brians says on May 7, 2008, 13:21:

closed at 1800. I would expect to see the dollar rally a bit.

rocinante says on May 7, 2008, 13:26:

Close still pending but I don't see a move from 1798.5500 (as of 4:20 PM Eastern). We'll see.....

"World economic indicators point to a democrat winning 2008. It will surely be Obama. Peso 1400 by November" Feb 5, 2008

Simon says on May 7, 2008, 20:12:

GO PESO!!!

"You want to talk to God? Let's go see him together, I've got nothing better to do."---Indiana Jones (Raiders of the Lost Ark)

Rubito says on May 7, 2008, 21:12:

I think that's a dumb move on their part considering it could get a LOT stronger soon.

---Violence is the price of freedom.---

BillBigD says on May 7, 2008, 21:17:

Sometimes when you get a 15%-20% move you hedge your bet. Besides $2B done by derivative contracts is not much at all.

rocinante says on May 8, 2008, 04:58:

Bill - the 2B doesn't move the market. The idea does.

Off the peso and on to the bolsa...

Recently there has been speculation that Colombia's credit rating is going to get upgraded. As a result Bancolmbia's stock rose 7 percent. No money involved, no 2B just specuation, rumor.

There is heavy interest in Latin America due to the upside potential, economic and poloitical confidence and thin float of M1 and everything else equity and non debt related. These markets including currency can move a good deal with just little news, demand or sell off. There are large amounts of foreign/global cash to be pumped into and removed from these LA sectors.

"Bancolombia paced the IGBC's biggest advance in a month after Standard & Poor's unexpectedly raised Brazil's country credit rating to investment grade, sending stocks to a record."

That's Colombian stocks - not Brazilian stocks.

That was a quote from Bloomberg (I don't have the link - google it.). News on Brazil's credit rating a few days ago catapults Colombian Stock Market. No money involved, no 2B and no news on Colombia. Why? Because Colombia's numbers are better than Brazil's so naturally Colombia could/should follow with a good rating in the near future.

"World economic indicators point to a democrat winning 2008. It will surely be Obama. Peso 1400 by November" Feb 5, 2008

Saltador says on May 8, 2008, 07:39:

Rocinante,
Colombias "numbers" are better than Brazils? What numbers? Are you saying the colombia economy is stronger than Brazils?
Not disputing, just wanting clarification.

rocinante says on May 8, 2008, 08:29:

``The market is saying we have much better numbers than Brazil and we should follow,'' Andres Jimenez, head of research at Interbolsa SA, Colombia's biggest brokerage, said by phone.

I don't have the link - sorry.

A hard data comparison would require some work but suffice it to say that currently Colombia's economic growth and other numbers, real or speculative are higher and more oportunistic than those of Brazil. Investors/speculators are convinced that it is only a matter of time before Colombia's credit rating and political rating are upgraded - meaning that some major foreign institutional investors who have been waiting to take advantage of this growth and high interest rates will be jumping in. Right now they can't/won't as only one of Colombia's long term debt ratings is considered "Investment Grade" and that is only by S&P - not by Moody's or Fitch although S&P is highly repectable.

"World economic indicators point to a democrat winning 2008. It will surely be Obama. Peso 1400 by November" Feb 5, 2008

Tinto (Moderator) says on May 8, 2008, 08:42:

In light of the credit markets over the last year or so and the inherent conflicts of interest when an issuer of toxic debt pays an agency to rate that debt AAA, maybe it's better to say "S&P (and their competitors) used to be highly respectable."

Related note: Moody's booted the guy with the title of President and COO today.

;-)

billyb says on May 8, 2008, 08:55:

Bancolombia Jumps on Credit Upgrade Speculation (Update3)

By James Attwood

May 2 (Bloomberg) -- Bancolombia SA, Colombia's largest lender, rose the most since July in Bogota trading on speculation South America's fifth-biggest economy will get its credit rating upgraded.

Bancolombia's preferred stock jumped 6.7 percent to 18,520 pesos, making it the best performer in Colombia's IGBC index. The bank's ordinary stock was the index's second best performer, rising 6 percent to 17,100 pesos.

Bancolombia paced the IGBC's biggest advance in a month after Standard & Poor's unexpectedly raised Brazil's country credit rating to investment grade, sending stocks to a record.

``The market is saying we have much better numbers than Brazil and we should follow,'' Andres Jimenez, head of research at Interbolsa SA, Colombia's biggest brokerage, said by phone.

S&P said in June that following the launch of its revised global recovery ratings scale, it increased the long-term debt ratings on Colombia's foreign currency senior unsecured debt to BBB-, the lowest level of investment grade, while maintaining the rating on the government at BB , one level below investment grade. Moody's Investors Service and Fitch Ratings both rate Colombia below investment grade.

To contact the reporters on this story: To contact the reporter on this story: James Attwood in Santiago at jattwood3 at bloomberg.net

Saltador says on May 8, 2008, 09:51:

I'd still like to know what numbers are so much better. Growth rate, sure, off a much smaller base, that is logical.
Not complaining either, I own Bancolombia stock and it has doubled since I bought it.
But I'd like to see a comparison of economys, Brazil and Colombia and see which is stronger.

BillBigD says on May 8, 2008, 21:00:

rocinante-Yes I saw that last week. PBR was up 7% that day. Which I own. I used to have CIB but sadly sold it at $32. I think why everyone is still leery on Brazil is they have been burned so often. Just my thoughts