Thread by @gauravsabnis

Here's my most memorable Argentina story. Was in BA in March 2019 for 3.5 days taking a class of undergrad students there as part of a Global Management course I teach. Half of them were Quant Fin majors, so obviously, I had packed the agenda with a lot of econ, fin talks.

For about 4-5 hours each day, there were talks from professors, analysts, start-ups, company visit. The rest of the day is socialization and exploration, mostly on our own except for dinner which was together. Now, these students were good students. Punctual, well behaved, polite

So except for one tiny incident later in Chile (very tiny), I didn't really have to do active chaperoning or even professoring. Plus I was generally letting them be. They're paying big money to be here. I'm not going to inject myself into their lives more than I have to.

So occasionally during the talks, if I noticed some attentions wander and phones be surreptitiously checked, I let it go unlike in class where I instantly address it. I was their age once. Heck, I'm my age now. Picking when to zone out is a crucial adulting skill. 😁

Predictably, the attention was tied to interest. They were most engaged during talks on economic policy, finance, and fin tech, especially in the fascinating context of 50% inflation for years in Argentina. Not so much during a dairy company visit. The inflation thing was big.

Before the talks, I had asked them to imagine the economic decisions one would have to make in an economy where inflation is that high! How do banks assesses risks and decide lending terms? How does currency hedging work? How does microfinance work with 50% inflation?

So by the end of the talks, most minds were blown and everyone was paying absolute attention looking at the fintech challenges. All very sophisticated and high tech. The company managing our visit had hooked us up with some cutting edge things in Buenos Aires. Five star type.

And here comes the story. At the farewell dinner, everyone was just like "how would X work in 50% inflation" where X was anything from retirement investment to robinhood to the bond market. With us were 2 local women in their late 20s who had been our host companions.

And y'all know how chatty Jersey kids are. Those two had practically been included in the group for any conversations. A student asked,
"How does mortgage work? How do you buy a house here?"

The two women looked at each other and cracked up in a sad laughter.

And what they told us was wow. Here's the story of one
"What mortgage when that money sitting in your bank account loses half it's value in a year? The banks can only trust the ultra wealthy to repay and even then, rates are crazy. No fin tech in house buying here."

"How I bought my house. How almost everyone not super rich buys a house. At the end of every month since I started working in college, whatever money remains, I turned into US dollars. Lots of USD in South America because of YOUR coke addiction."
*Uncomfortable laughter*

"I kept stashing those USD in a secret place in my house that.....I cannot share sorry. Every Argentinian has a stash of USD. What else can you do with 50% inflation? Once I had enough money to buy a small house I liked, I bought a specialty money armor to wear under my clothes."

"Everything, my stomach, my back, my boobs, wrapped in a jacket lined with dollars. It was a hot day 😭 and y'all make your money with cotton 😭."
*A big WHOA TIL sidebar to confirm with the prof (me) that USD are indeed cotton & linen.*
"I got dressed over it, sweating."

"My father and brother came with me, each carrying a gun they had borrowed. You can get robbed outside the builder's office because any robber knows there will be people with lots of cash walking in. So we have to take precautions."

"I don't have a brother. I just hired guys."

Said the other host.

"Going into that building to buy my house, I was weighed down and sweaty. And was thankful for my dad and brother displayed their guns because we definitely were scoped out by a couple of guys on a motorbike. But when I finally took it off in the office,"

"it felt like a much heavier weight had been stripped off my body. I had bought my own house."
And she seemed to be holding back tears. As were many of us. That personal story of how hard it is for someone just like you in another country to do things you take for granted.

"This is a starter house though. Not long term house." she added

"What's that?"

"First decent house in nice neighborhood with good resale value. Small but enough for me now. But I want to have kids and maybe have a husband."

*That sequence led to some exchanged looks 🤣*

"Better to turn money into house than hide it in a mattress. My saving continues. Once I save enough to upgrade, someone will come to me with a money coat to buy my house. Then I will go buy a slightly bigger one. We have to build our dream house sale by sale."

The other woman's story was similar. Except in her case, it was her and her wife saving together with the wife's mother for a house upgrade. No males. So they hired a proper security agency to escort them to buy their house.

To blow the student's minds even further, she added, "We are in a pretty good job by the way. We are upper middle class, quite privileged to be able to even do this. The real Argentina outside the shiny Globant office have harder lives that we can't even pretend to understand."

(The Globant visit had indeed transported me back to my Bombay or Bangalore days. How as soon as you step through the office doors, it's not just the AC that soothes you. It's this temporary sanitized quasi first world illusion that means more with the gloss.)

So yeah, their point was, it's way tougher for us to buy a house here than for you in the US. And yet, we are the lucky ones here!

No PowerPoint presentation in that trip was more of a learning experience for the students imho.

The other thing that fascinated students the most was the bizarre story of the Argentinian government pressuring local McDonald's franchises to fix the price of a Big Mac (google it). Cos financial press loves using the Big Mac Index. That's seriously sleazy media manipulation.

Basically the Argentinian govt's response to its economic woes has often been similar to the Modi govt's. There really isn't a problem other than vested interests, probably foreign, conspiring to create an image problem for Argentina. So perception above policy.