We got up before dawn. We kissed Maria, Anna, and Marta…gave Jorge a manly hug…got in our pickup truck and took off. We looked back and waved, and then we were off. Down the tree-lined driveway…out between the stone walls…and on our way.
The drive to Salta airport began badly. We had barely left the house when we almost got stuck on the mud. Even with 4-wheel drive, we sank into mud up to the axels. It didn’t seem like we were going anywhere.
“Boy is this stupid…to get stuck in the mud in the middle of a desert,” said Elizabeth. But the rivers are running high and wide in Salta province…about which, more later in the week.
When we arrived back in civilization…or at least back in Salta, Argentina…we were happy to see that nothing much had changed.
Just as well. We didn’t want to write much about the financial world anyway.
Up in the Andes, the world of money seems a million miles away. Especially at roundup time. Nobody has any money…and nobody seems to need it.
But the subject came up anyway. We discovered that one of our dear readers – lovely and cultivated, like all our dear readers – lives next door, which is about 45 minutes away. Her husband, a wine producer, brought up the subject:
“My investments weren’t hurt directly. I don’t like buying stocks and bonds. I don’t want to check stock prices. So I invest in my business…or in art. Things I know about…things I like.
“But what is happening in the wine business is that the upper middle part of the market is downscaling. The upper end is okay. People who spend more than $100 for a bottle of wine don’t really care that much. It’s an incidental expense. Sales at the upper end are okay. They’re okay at the bottom too. A guy loses his job; he figures a cheap bottle of wine is a good way to forget his worries. But in the middle, people are watching their expenses closely. So when they go to a restaurant, they order a cheaper bottle of wine. Or they don’t go out to eat at all. They invite friends over to the house…and go to liquor store and pay a few dollars for a bottle of wine that would have cost them $30 in a restaurant. The market between $50 and $100 has collapsed.”
The wine market is probably similar to many other markets. The middle class is downsizing. They need to save money. They’ve got to cut expenses anyway they can. So, instead of buying a $75 bottle of wine, they buy one for $29. Instead of buying a new car every three years, they wait 5 years. Instead of staying at the Ritz, they stay at the Marriott.
When we went to Buenos Aires, we used to stay at the Four Seasons – which was fairly cheap by international standards. Now, with the worldwide financial meltdown, we’re looking for savings just like everyone else. So this year we stayed at a little hotel in the Palermo Soho section of town called the Ultra…which also happens to be near our Markets and Money outpost down here.
As you may know, we are very interested in Argentina. If there is any mistake in finance that the Argentines haven’t made, we don’t know what it is. So, we study the history of the Argentine economy to try to figure out what to expect next in the rest of the world. We maintain a little staff of researchers and writers down here to help.
The Ultra is not the Four Seasons. It is barely a single season…maybe from January to June. Still, it is not a bad place to stay – especially if you want to save money – and available for about a third of the price of the Four Seasons. In a global financial meltdown, it is a good way to save money.
Palermo Soho is a young, hip, stylish part of the city. The streets are cobblestoned. Practically every other building is a fashionable clothing store or a restaurant. It’s a bit like the area of Los Angeles inland from Venice Beach – but more lively and interesting.
On our way to the ranch, too, we saved money. We typically stay at a Starwood hotel in Cafayate. This time, we found another hotel nearby – not quite as nice, but less than half the price. We also flew a different airline – the Brazilian airline TAM, rather than British Airways. It was cheaper and just as nice. The only problem was we had to stop over in Sao Paulo before going on to Buenos Aires.
Your editor could probably afford to stay at the Four Seasons or the Starwood Hotel if he wanted. But he is getting in the spirit of the depression. If he can save a buck…he is happy to do so. There must be millions…billions…of others doing the same thing.
for Markets and Money