Chile 2017 Presidential Election

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HybridAmbassador
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Re: Chile 2017 Presidential Election

Post by HybridAmbassador » Sun Aug 13, 2017 4:18 pm

I'm pretty sure that the new president will be investing heavily behind the Chilean mining companies and foreign owned as well. The world is ( at least in Europe, mostly France and Germany) they will be facing out the most popular in Europe
Diesel power for Automobile use, due to the re-known Diesel gate of VW. Their sales flattened out and seems moribund. Beyond 2020 they all be switching to electrical power source and the battery will be needing the Lithium metal, which is abundant in Chile. May be good investment opportunity to be buying stocks in Lithium mining, it could be good for your
financial portfolio..
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Re: Chile 2017 Presidential Election

Post by admin » Mon Aug 14, 2017 11:06 am

I am really seeing a ground swell now of hardcore left voters among friends and family, saying they are voting for pinera.

Some of the People that actively fought the dictaorship, or just swore for decades they would never vote right under any circumstances after the dictaorship.

The debate is shifting rappidly from will pinera win, to will pinera win in the first round of voting. Now it starting to look like that is a real possibility.

There is some very serious anger too among the traditional poor working class that have always voted left.

A friend told me this story the other day. He was talking to the owner of a restaurant that mostly has a clientel of poor working class. The owner said , "i would hire haitens in a second to work, but the clients would boycot my restsurant and put me out of buisness."

I was thinking about it. Among friends that own buisnesses, most are either hanging in by their fingernails at best, some are in the process of closing or selling, and a few are already gone; my back of the napkin calculation is at least 200 jobs were eliminated, often including their own.

My concern is that the damage to many is so extensive they wont be back, ever. Many are simply taking early retirement. Some have declaired they are done investing chile (these are chileans). Many were first time entrpenuarers, that are now gun shy about doing biz on their own (one thing to fail for your own lack of experience, another to have an administration kill your market outside if your control ). Many are bankrupt, both the biz and persinally. They cant come back, even if they wanted to.

The bankrupt or nearly bankrupt ones all have one thing in common. They were shafted by the bachelet administration on goverment contracts that were never paid, stalled on the payments until it was too late, or the goverment stopped issueing contracts in their market that they depend on.

Where did the money go bachelet?

The other one that really killed companies was the transition from the FUT tax, causing companies and indivuals to suddendly get tax bills that were often many times yearly revenue of the company at one time. Some where larger than the value if the company. The defered FUT withholding, was in many cases just paper profit. It is not like these buisness have a big bank account somewhere the can suddedly pay a massuve tax bill with. For many the choice is easy. Close the company.

The damage is serious and widespread. Many are not going to make it another year, for a new administration to take office. The small biz are looking at another 1 to 2 years, even under the best case scenerio.
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tiagoabner
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Re: Chile 2017 Presidential Election

Post by tiagoabner » Mon Aug 14, 2017 11:41 am

admin wrote: The other one that really killed companies was the transition from the FUT tax, causing companies and indivuals to suddendly get tax bills that were often many times yearly revenue of the company at one time. Some where larger than the value if the company. The defered FUT withholding, was in many cases just paper profit. It is not like these buisness have a big bank account somewhere the can suddedly pay a massuve tax bill with. For many the choice is easy. Close the company.
Would you mind going in detail about how can there suddenly be a tax higher than the company's value? I'm not an accountant, and I am by no means an expert in Chilean tax law, but it stands to reason that driving taxes up to the point of bankrupcy is not good for the companies.

Do the Bachelet team even have a financial advisor?

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Space Cat
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Re: Chile 2017 Presidential Election

Post by Space Cat » Mon Aug 14, 2017 12:28 pm

Second on this. The tax mess is so complex – I'm still trying to grasp what happened. A short summary would be great.

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Re: Chile 2017 Presidential Election

Post by admin » Mon Aug 14, 2017 6:51 pm

Well the super over simplfied version, to the point of being wrong, is that companies had been allowed to leave income in the company defering paying tax on it indefinetly. Which obviously led to lots of creative accounting, but was the tax enviroment companies have been working with for years. Then one day it all ended, suddendly.

If you are a small company with limited real cash flow or assests; well, ...


Here is another bachelet brainstorm involving creative accounting: forcing afp's to refund fees if the returns drop and here is valdez admitting that he did not do the math on how it would affect the returns on the afps. So the future pensions system returns would be even smaller, because why would any afp invest in anything with any sort of risk / return, for being on the hook if they had a bad few years (which is exactly what started this bs in the first place). Can fees be lowered? Of course. But this is so stupid it has to be a bomb being planted by the communist in the bachelet administration to blow-up the private pension system completely.

http://m.elmostrador.cl/mercados/2017/0 ... os-fondos/

Never mind the new proposal for a group of goverment apointies that will manage the new public pension system, what they will invest in, who will manage the money (i.e.what private company gets the ultimate deposit / brokerage ).

Yet, somehow, they will magically give something like a 20% increase in pension checks to people that are currently retired.

Saving and investing, does not work like that. Even in magical socialist accounting land, where 1 unicorn + 2 unicorns = 1 billion unicorns.

However there is financial system that math does work?

Ponzi would be so proud.
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thisisreallycomplicated
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Re: Chile 2017 Presidential Election

Post by thisisreallycomplicated » Mon Aug 14, 2017 9:03 pm

admin wrote:Saving and investing, does not work like that. Even in magical socialist accounting land, where 1 unicorn + 2 unicorns = 1 billion unicorns.
It works just fine, if those are fiat unicorns.

start with this:
1 unicorn + 2 unicorns = 1 billion unicorns

if each unicorn is a fiat unicorn, then substitute unicorn with 0, so:
1 * 0 + 2 * 0 = 1 billion * 0

then simplify:
0 = 0
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Re: Chile 2017 Presidential Election

Post by admin » Thu Aug 17, 2017 6:56 pm

So study comes out that new pension reform proposed could add up to additional 394,000 unemployed. That would take the economy to something like 1 million people unemployed, in a country with a total pop of about 17 million, and lot less of working age.

Chile's top economist and math wiz, Bachelet does not believe it and has not read the report. This after chile's second best economist and math wiz, valdez admitted he never did the math on decreasing returns from the current afp system (see above post).

https://www.df.cl/noticias/economia-y-p ... 85255.html

Does anyone on the left own a caculator? How about a piece of paper and pencil?

All the left canidates are making the same mistake that got the economy in to this mess when they passed the tax reform: they are making hypothetical calculations based on sunny day hopes regarding POSSIBLE GDP growth predictions.

In otherwords, they are spending money chile does not have. Not 10 or 20 years from now, but right now.
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Space Cat
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Re: Chile 2017 Presidential Election

Post by Space Cat » Thu Aug 17, 2017 10:31 pm

admin wrote:In otherwords, they are spending money chile does not have. Not 10 or 20 years from now, but right now.
Could be a good thing? It will hit everybody faster and not snowball into a crisis.

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Re: Chile 2017 Presidential Election

Post by admin » Fri Aug 18, 2017 9:04 am

Let's see, take 1 million people out of work force of mas o menos 9 million of working age (think it is more like 7 million, but can not recall the exact number), even for a year, so they are not contributing anything to their pension. Even if it is for a year, probably wiping out that extra 5% gain (if that, because it is also some magical investment scheme).

Hell, they probably lost all the pension gains to the just in lost GDP growth by talking about it, and making investors hesitate or outright invest somewhere else. The same ones that have been stung so bad by the tax reform, they are taking their investment money to other countries out of spite.

The bigger impact, as I have said before, will probably be simply employers dialing back how much they pay or outright eliminating the job with automation.

But of course 5% of zero is, a billion unicorns. So, no worries.
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tiagoabner
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Re: Chile 2017 Presidential Election

Post by tiagoabner » Fri Aug 18, 2017 6:20 pm

Pinera, who is not dumb, quickly pointed out that not believing in factual reports is usually associated with those that believe in unicorns:

http://www.t13.cl/noticia/politica/pine ... -pensiones

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Re: Chile 2017 Presidential Election

Post by admin » Sun Aug 20, 2017 9:50 pm

Hey valdez finaly admits guess what?

Everything has a cost.

http://www.pulso.cl/empresas-mercados/v ... -gratuito/

Even if unicorns are not real, you still have feed them and clean up after them.
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Re: Chile 2017 Presidential Election

Post by admin » Sun Aug 20, 2017 10:06 pm

Pinera up 4 points to 40% in newst poll. Sanchez lost ground.

My bet is that number continues to climb as we get closer to the election, but i dont think it will reflect the voting numbers. Lot of people are too embarressed to admit it in public that they are thinking about voting for pinera.
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