Mauricio Macri won the presidency of Argentina in November of last year. In December he gave the Argentine economy its first dose of tough medicine: a 30% devaluation of the peso. In U.S. dollar terms, the Argentine stock market bottomed in January, and since then has rallied about 70%.
Macri’s pro-business reforms have brought Argentina back into the global community after its exile under Nestor Kirchner and Cristina Fernández de Kirchner, his immediate predecessors. The Kirchners were Perónists – Argentina’s home-grown populist political and economic doctrine that originated with President Juan Perón in the 1950s, and which over the decades led to deep economic dysfunction. Macri’s narrow victory last year was heralded as a watershed moment for the country. He put an end to the long standoff between Argentina and some of its holdout creditors, opening the way for the country’s access to international capital.
The most recent policy victory that shows how Macri is shepherding Argentina’s battered economy is a tax amnesty. This amnesty was announced in May: Argentines with cash under the mattress at home, or held in undisclosed accounts abroad, would be able to bring their money out of the shadows, avoid penalties, and pay taxes owed at a low rate. It runs through the end of the year, and observers who know the behavior of Argentines expect the bulk of funds to come in during the last weeks of December.
Argentines are thought to be holding $200 to $400 billion in unreported assets cash domestically and abroad – an entirely reasonable consequence of the government’s wealth-destroying habits over the past decade-plus. Analysts think between $60 and $80 billion will be declared under the amnesty, resulting in government revenues of as much as $6 billion and capital inflows of as much as $14 billion. The revenues will help the government get through 2017, the last really challenging year of debt maturation, with less debt issuance and more funds available for infrastructure spending to boost the economy.
We noted that the domestic funds being declared – cash held under the mattress – is far exceeding expectations. This is a hopeful sign, because it implies that this segment of the population is confident in Macri’s governance – and confident that he will stay the course and that reforms will not be rolled back.
Investment implications: Argentina’s reforming President, Mauricio Macri, continues to impress. A tax amnesty he announced in May is producing better-than-expected results, and by the end of the year, Argentines are expected to declare and repatriate up to $70 billion hidden under the mattresses and stashed abroad. This will generate much-needed revenue to handle next year’s maturing debt, after which the schedule of maturation lightens. It will also bring needed capital inflows for Argentine businesses. The initiative’s strong success thus far argues that wealthy Argentines are confident in Macri’s staying power, and trust the durability of the country’s turnaround.
Cows on Wi-Fi Show the Future of Health Care
We’ve written several times in the past about the coming integration of health sciences, the internet of things, and big data analytics – a noteworthy example is Alphabet's (NASDAQ:GOOG) life sciences research lab, Verily Life Sciences. Verily is pursuing a variety of potentially transformative projects in this area:
- Contact lenses that allow people with diabetes to continually check their glucose levels without a blood test;
- A spoon for people with tremors;
- The Baseline Study, a project to collect genetic and molecular information from enough people to create a picture of what a healthy human should be, so that monitoring will detect deviations from the baseline and allow early intervention before symptoms of disease even appear; and
- A disease-detecting nano-particle platform.
It is likely, though, that these kinds of technology will see their first implementation in animal populations rather than human populations. Particularly in agriculture, this is already occurring.
We read recently about a European start-up, SmaXtec, which is putting sensors in the rumens of cows – the first of their several stomachs. At a price of about $500, these sensors last four years (the producing life of the average dairy cow), and automatically send data about stomach pH, the cow’s temperature, her movements, and how much food and water she’s consumed. The big benefit is an early warning of illness, which saves time by requiring fewer proactive veterinary examinations, and since sickness is caught earlier, antibiotic regimes can be more brief. The sensor also allows a clearer view of a cow’s reproductive cycle, a critical part of any dairy operation. So far 15,000 cows are online – out of the 90 million dairy cattle worldwide. Similar technology is being prepared for other animals, such as chickens.
We hope that this technology will not only increase agricultural yields, but will improve the lives of agricultural animals by keeping them healthier and reducing the need for drugs and medical intervention. We can watch here to see the first implementations of the technologies that will shape human health monitoring in the near future.
Investment implications: Firms such as Alphabet (NASDAQ:GOOGL) are exploring the intersection of health sciences, the internet of things, and big data analytics, and will eventually usher in an era of finely-tuned health monitoring that will allow humans to receive more effective health interventions before disease symptoms even appear. While these technologies are in the experimental stage in humans, they are already beginning to be deployed in animals, especially in systems to monitor the health and fertility of agricultural animals. Such technologies have the promise of increasing yields, and bettering living conditions and animal welfare. For a view of what will be coming in your own healthcare, watch cutting edge animal health tech.