Chile 2017 Presidential Election

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fraggle092
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Re: Chile 2017 Presidential Election

Post by fraggle092 » Mon Nov 13, 2017 11:42 am

admin wrote:
Fri Nov 10, 2017 7:01 am
I am also not sure you can generalize what any particular group of foreigners want. Are for example the thousands of venezuelains here going to vote for a far left socialist canidate after what they have been through?
I think that most Venezuelans, who have been conditioned since at least the 1980s, would tend to vote leftist. Many blame the country's problems on Maduro's handling of the economy, rather than on the system itself. Even now, the memory of Chávez is still admired by many Venezuelans, who seem unable or unwilling to understand that he was responsible for the current calamitous state of the country.
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Re: Chile 2017 Presidential Election

Post by at46 » Mon Nov 13, 2017 4:17 pm

fraggle092 wrote:
Mon Nov 13, 2017 11:42 am
admin wrote:
Fri Nov 10, 2017 7:01 am
I am also not sure you can generalize what any particular group of foreigners want. Are for example the thousands of venezuelains here going to vote for a far left socialist canidate after what they have been through?
I think that most Venezuelans, who have been conditioned since at least the 1980s, would tend to vote leftist. Many blame the country's problems on Maduro's handling of the economy, rather than on the system itself. Even now, the memory of Chávez is still admired by many Venezuelans, who seem unable or unwilling to understand that he was responsible for the current calamitous state of the country.
Yes. And some countries, like Canada, for example, go a step further by staffing the immigration bureaucracy with leftists to filter out right-wingers.

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Re: Chile 2017 Presidential Election

Post by admin » Tue Nov 14, 2017 9:50 am

Well, here comes Pinera's left-hook. The Evangelicos are organizing to push Pinera over the top in the first round.

http://www.pulso.cl/actualidad-politica ... -respaldo/

It seems obvious on some level that conservative Christians would lean more right, right? Well, not really. The Evangelicos base, tends to be mostly poor, left wing voters. Essentially all the Christians that the Catholic church has alienated in Chile over many generations.

That is, until Bachelet alienated the Evangelicos in the last couple of years. Regardless of what you think about Gay marriage, abortion, and so on, the Evangelicos don't like what Bachelet's and the coalition of far left did the last couple of years. So, it is time for some pay back. If they mobilize in any numbers, it can be a very sudden death for the left in the first round.

Again, that is just one group I don't think is being counted by the polls correctly.

The other, and probably the most surprising source of Pinera support, is the communist and socialist. I got a bunch of friends that are all pretty hard-core, old school, communist party and socialist voters. They are all voting for Pinera. The "new" communist party, made up of the student movement leaders, has alienated them for all sorts of reasons.

What all these sleeper cells have in common? They don't so much like Pinera, as want to punish some group from the left political base that pissed them off.
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Re: Chile 2017 Presidential Election

Post by Britkid » Tue Nov 14, 2017 10:15 am

Peso currently at 628 to the $.

Would it be fair to say that a right wing victory would strengthen the peso, and push it to less than 628.

While a left wing victory would weaken the peso and make it go above 628.

And that therefore a left wing victory would, at least in this one aspect, be advantageous for those of us that are living here but earning foreign currency in amounts fixed the $ or other foreign currencies.

Does that look right?
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Re: Chile 2017 Presidential Election

Post by fraggle092 » Tue Nov 14, 2017 3:45 pm

Its not possible to make a straightforward correlation. For a start the markets already accept that Piñera will be elected so any peso strengthening on that account has already happened.

The price of Copper, or what the US treasury does with interest rates, often have bigger effects locally than internal goings-on. Even this years dismal economic indicators, the downgrade in country risk by the big credit agencies, and the resignation of Bachelets economic team en masse didn't seem to bother the currency speculators.

Some professional economists who last year predicted a CLP/USD rate of around 680 by December this year are looking a bit silly.
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Re: Chile 2017 Presidential Election

Post by Britkid » Tue Nov 14, 2017 4:55 pm

The markets will have a built in a certain probability of Piñera being elected I assume. Say they assume a 75% chance of Piñera and a 25% chance of a left government of some sort.

Then a right wing victory would still strengthen the peso by a small amount, and a left wing win would weaken it by a bigger amount. But, it should shift either way to a certain extent, unless the odds of Piñera winning are thought to be close to 100% by the market, which probably isn't the case given the polling numbers.

It is certainly possible however that whoever wins will make little difference to the strength of the Chilean economy or the exchange rate, in which case the needle might not move at all on Monday.

I guess we'll just have to wait and see until Monday (at least).
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Re: Chile 2017 Presidential Election

Post by admin » Wed Nov 15, 2017 8:15 am

I think just the election year uncertanty is supressing the peso. Investors hate uncertanty, left or right. My guess is that with copper over $3 a pound we should be around 550 pesos to the dollar.

A suprise left win would not be good, but it would at least give investors (domestic and international) an idea of how to position themselves for the next 4 years. You can see the hesitation in the ipsa, especialy stocks related to things like construction over the last month. Sort of moving sideways, with some profit taking just in case this election goes badly.

S&P was talking about another downgrade before the election, but have not seen anything yet.

That said, if pinera wins, there is a green light for growth and investment to return, by late next year the central bank could start raising interest rates, the peso should start strengthing.
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Re: Chile 2017 Presidential Election

Post by admin » Wed Nov 15, 2017 8:24 am

Well regardless of how this turns out, it is nice to see an presidential election that is open and transparent. That such a wide range of caidates are on the ballot to choose from. For example, Eduardo Artés, the super lefty, no chance of winning, reported he only had 46,000 pesos of donations to his campaign. Still he gets to play through the first round with deep pocket canidates. No two party system lock out. Yea they need to improve the loan system for canidates to be more fair, but for the most part things are working.
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Re: Chile 2017 Presidential Election

Post by jehturner » Thu Nov 16, 2017 7:53 pm

admin wrote:
Wed Nov 15, 2017 8:15 am
S&P was talking about another downgrade before the election, but have not seen anything yet.
I believe I read that they decided to maintain it for now.

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Re: Chile 2017 Presidential Election

Post by admin » Thu Nov 16, 2017 8:46 pm

Yea, it was kind of strange to have a credit agency announce that they were going to issue a down-grade like a week before the election. Like another week was going to matter one way or the other. It just smelled bad.
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Re: Chile 2017 Presidential Election

Post by admin » Thu Nov 16, 2017 8:50 pm

I am not sure it is was related, and I can not put my finger on it, but there has been some very odd stock moves in the Chilean market without any real news to drive it (at least that I can find). I was sort of writing it off as pre-election stock market jidders (always good for some deals), but there was just some wild moves to the point I was suspecting that the web site for the bolsa was acting up (I only sort of trust their numbers).
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Re: Chile 2017 Presidential Election

Post by fraggle092 » Thu Nov 16, 2017 10:38 pm

From EMOL:

Chilean shares face their day of reckoning prior to elections.

According to Bloomberg, the 20% IPSA rise since Piñera announced his candidacy cannot be justified by company profitability, in fact profits have declined by an average of 17% this year.

So its a bubble. Already share values are drifting lower due to profit-taking.

The original Bloomberg article quoted by EMOL doesn't appear in Google, must be subscription-only.
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