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0 pointspaganel8y ago0 comments

Argentina has just issued a 100-year bond that was over-subscribed by a factor to 4-to-1 or so. That's a country that defaulted 5 times in the last century, if I'm not mistaken. Trillions of euro-denominated deposits stood at bellow 0% for more than a year. Real wages are continuously going down even though the unemployment figures are pretty damn good. These just off the top of my head writing on my phone.

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nerfhammer8y ago

> Argentina has just issued a 100-year bond that was over-subscribed by a factor to 4-to-1 or so.

I'm not aware of an economic theory that says mispricing should be impossible, especially for a price set in advance.

> Trillions of euro-denominated deposits stood at bellow 0% for more than a year.

As far as I can tell this is referring to the an ECB policy for deposits of other banks to the ECB. This is not a market price; the ECB is actually trying to discourage its bank deposits. No contradiction of economic theory here.

> Real wages are continuously going down even though the unemployment figures are pretty damn good.

I'm not aware of real wages going down "continuously". As far as I can tell it's remarkably flat. This, however, is closer to something that actually doesn't seem to make much sense at first glance according to economic theory.

FYI I tried googling all of these things using terms you used and mostly got dubious zerohedge articles near the top.

paganelOP8y ago

To paraphrase Marx, in Argentina's case a large enough quantitative change becomes a qualitative one. If you really think that a 100-year "price mismatch" is just that, a glitch, then we are talking about very different things.

That ECB policy was indeed a price, don't know what they want to "discourage" or not, fact is that if you wanted to deposit money to the ECB you had to pay them for the privilege. AFAIK since capitalism set in properly (about 200 years ago) it has almost been the case that you were supposed to receive money as interest when depositing it somewhere (to a king's vault, to ECB, it didn't matter).

Am on mobile, too lazy to look for the real-wage charts. I had just seen one in the FT detailing its evolution for the UK since 2005 or so, with only 3 years out of those 11-12 seeing real wage increases. I used the same source for commenting on Argentina's debt, i.e. last Friday's Financial Times. I used to read zerohedge from time to time, but I don't like their layout, I've mostly stuck with the FT and the Economist for my economy and financial-related info (there was also an interesting economics-related blog under the economist.com domain).

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