The Chile Economy, Social Crisis and Virus Impact

National Crisis, Emergencies, and Natural Disasters in Chile; including the experiences of Chile Forum Members have shared in current and in past crisis, as they have assisted each other and Chile. Things will always go wrong. It is how you deal with it that counts, and that starts with information. When things go wrong, this is the place to come to exchange information about what is going on in Chile.
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tiagoabner
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Re: The Chile Economy, Social Crisis and Virus Impact

Post by tiagoabner » Thu May 13, 2021 10:19 am

Ohio National, one of the largest US insurance companies, has started the process that may end in a lawsuit against the Chilean government due to the AFP withdrawal process allowing people to "withdraw" money from "rentas vitalícias"/annuities: https://www.biobiochile.cl/noticias/eco ... cias.shtml

Their argument is that the process isn't equitable and it opens a legal precedent to withdrawing funds from an annuity. For those not familiar with them, the point of an annuity is for you to give a large sum of money to an insurance company that will then pay you a certain sum every month. At least in the US, they get a special tax treatment and they're a useful tool for people that need to make a large sum to catch up on their retirement savings. I'm not sure if that's the case in Chile, but that seems likely.

I know that it's hard to feel bad for insurance companies, but the precedent of allowing for contracts to be breached due to the government's incapacity to handle the country's economy is indeed a very serious one. Fucking up with foreign investor trust is a good way to end up like Argentina.
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admin
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Re: The Chile Economy, Social Crisis and Virus Impact

Post by admin » Thu May 13, 2021 10:49 am

yea, the comi kids in congress seem to not have a grasp of the consequences of their bullshit.

I am suspecting there will be a whole pile of "expropriation" related claims coming down the pipe against the government for their actions recently.
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Re: The Chile Economy, Social Crisis and Virus Impact

Post by admin » Sun May 16, 2021 9:25 am

so, results on a "universal income" study and the impact,

https://www.theatlantic.com/ideas/archi ... ff/618174/
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Re: The Chile Economy, Social Crisis and Virus Impact

Post by admin » Mon May 17, 2021 12:27 pm

Well, markets are not liking the results. 714 to the peso on xe.com right now, and predictions of heading to 730.

Seeing 7% down on a lot of the big names in the IPSA.

That said, think it is an over reaction. We are looking at years, if not more, before any impact a constitutional rewrite might have on anything in the real world.

But, copper is up to 4,71 a pound.
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Re: The Chile Economy, Social Crisis and Virus Impact

Post by admin » Mon May 17, 2021 12:34 pm

It is kind of a self-funding process, in an odd sort of way.

Market thinks Chile is going to go all lefty, and start spending more money on social programs, etc.

Market freaks out about the future copper supply, driving the price up.

Chile makes more money, to finance the lefty agenda for social programs, without blowing out the national debt. :lol: :roll:
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Re: The Chile Economy, Social Crisis and Virus Impact

Post by tiagoabner » Thu Jun 03, 2021 5:27 pm

The same populist congresswoman who proposed the third AFP withdrawal has just proposed the withdrawal of 100% of retirement funds, which would effectively kill the Chilean retirement system: https://www.t13.cl/noticia/politica/pam ... 03-06-2021

I don't think this would pass the constitutional court, but weirder shit has happened before.
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Re: The Chile Economy, Social Crisis and Virus Impact

Post by admin » Thu Jun 03, 2021 5:33 pm

tiagoabner wrote:
Thu Jun 03, 2021 5:27 pm
The same populist congresswoman who proposed the third AFP withdrawal has just proposed the withdrawal of 100% of retirement funds, which would effectively kill the Chilean retirement system: https://www.t13.cl/noticia/politica/pam ... 03-06-2021

I don't think this would pass the constitutional court, but weirder shit has happened before.
she is not the only one. there is an UDI member that is backing it too, he says to avoid a left wing president from nationalizing the AFP funds.
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Re: The Chile Economy, Social Crisis and Virus Impact

Post by gringalais » Thu Jun 03, 2021 5:37 pm

An UDI guy was also talking about that.

https://www.biobiochile.cl/noticias/nac ... cion.shtml

I'd take it. I've taken two of my allowed withdrawals so far and it's doing better in stocks that it would have been in the AFP.

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Re: The Chile Economy, Social Crisis and Virus Impact

Post by 41southchile » Thu Jun 03, 2021 5:40 pm

tiagoabner wrote:
Thu Jun 03, 2021 5:27 pm
The same populist congresswoman who proposed the third AFP withdrawal has just proposed the withdrawal of 100% of retirement funds, which would effectively kill the Chilean retirement system: https://www.t13.cl/noticia/politica/pam ... 03-06-2021

I don't think this would pass the constitutional court, but weirder shit has happened before.
The same populist congresswoman that went from 15 percent support last month to 4 percent yesterday, she is a one trick pony that people are seeing through already. (or some weird polling going on there)
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Re: The Chile Economy, Social Crisis and Virus Impact

Post by tiagoabner » Thu Jun 03, 2021 5:48 pm

gringalais wrote:
Thu Jun 03, 2021 5:37 pm
I'd take it. I've taken two of my allowed withdrawals so far and it's doing better in stocks that it would have been in the AFP.
It's not that hard to beat the AFPs by shoving it all in diversified mutual funds, especially with AFP's charging an almost-criminal 6 to 13% assets under management fee. I work on finance and the most I've ever heard about was 3% by a top-dog financial firm in NYC.
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Re: The Chile Economy, Social Crisis and Virus Impact

Post by admin » Thu Jun 03, 2021 8:35 pm

tiagoabner wrote:
Thu Jun 03, 2021 5:48 pm
gringalais wrote:
Thu Jun 03, 2021 5:37 pm
I'd take it. I've taken two of my allowed withdrawals so far and it's doing better in stocks that it would have been in the AFP.
It's not that hard to beat the AFPs by shoving it all in diversified mutual funds, especially with AFP's charging an almost-criminal 6 to 13% assets under management fee. I work on finance and the most I've ever heard about was 3% by a top-dog financial firm in NYC.
hell, it's not hard to beat the AFP at a casino. 😆 🤣

At least you might get free drinks.
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Re: The Chile Economy, Social Crisis and Virus Impact

Post by gringalais » Thu Jun 03, 2021 8:49 pm

I really wonder what they are doing with the AFP money. Why are the fees so high and returns so bad? I plan to take the third withdrawal too. Currently, I have a mix of mutual funds, stocks, and an emergency savings account.

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