The dollar and market doubt: controlled or uncontrolled shock?

The dollar and market doubt: controlled or uncontrolled shock?
September 8, 2023 – 00:00

Patricia, more distracted than a dog in a maze. Short fuse Melco effect? One of the dollarizers gave a lecture. Very interesting EcoGo Zoom in search of the lost “anchor”.


Comment almost repeated in every financial meeting about the Juntos candidate, Patricia Bullrich, who continues to be seen unfocused and disoriented. And the Juntos campaign reflects this. She is stopped and almost aimless. Until you have played the card Melconian, It does not seem to have borne much fruit and even generated some noise around the candidate’s advisors due to the prominence that the economist and his media raid adopted. They see Bullrich as insecure, and that is a product of the mistakes of his consultants and pollsters who anticipated triumphs in several provinces and the results were quite the opposite. This injected him with doubts and insecurities about the methodologies and his advisors. He now hopes to make a comeback in Santa Fe, but there are doubts.

Obviously the dollarization It also monopolizes debates and meetings, and in this sense a zoom from Texas with one of those who designed one of the schemes that most excites people was very revealing. Milei. The economist in question explained that everything was born from a paper that they began to write with the other author and think about a scheme for Argentina and he did not think that one day it could be in the national debate. The author maintained that dollarization was the faster way than reforms to reach the midterm elections, because it imposed a quick and expansive adjustment and on top of that it gives time to make other reforms. In another reserved meeting, one of the main gurus of the City emphasized that it was not time to think about the monetary system but rather about the inheritance that the next government will receive, which according to him has worsened after the latest measures. from Minister Massa. In this regard, another colleague described in another breakfast with market men that the 4.0 soy dollar was an eighties deja vu similar to the Sigaut experiment.

A banker and a mutual fund industry colleague commented on the interesting counterpoint between economists Marina Dal Poggetto of EcoGo, the hostess, and Santiago Montoya, man with ties across the political spectrum. They said that a large part of the debate revolved around the consequences of the absence of an anchor that did nothing more than, by devaluing without a program, escalate the nominal value, and everything lasted less than a weekend, the gap once again climbed above 100 %. They say that they agreed that the results of the PASO also increased the levels of uncertainty. And now the market perceives a political change but with uncertainty about the government program.

The hardships of companies that contracted coverage but the tax devaluation wreaked havoc on their balance sheets were also discussed in this Zoom reserved with clients. Regarding inflation, the estimates of EcoGo They realize that August would be above 11% and September, which they had at almost 13%, now with the survey of the first week it gives them between 10 and 11%. Looking forward, they consider that today the option, as in 2015, of gradualism, is not there. A relative price shock is required and establishes a credible anchor. That is why they warn that the question is no longer shock or gradualism, but controlled or uncontrolled shock that the nominality escalates permanently, either because it was assumed that the dollar was going to have a ceiling that it did not have (Cavallo 1982) or because it was assumed that the distributive bid did not escalate behind it (Rodrigazo in 1975). That is why the challenge for the next government will be to hit him from the start because then he has the mid-term elections. In this regard, they recalled that it took Menem two years to stabilize. Montoya contributed, with his astute political vision, a curiosity: the error of the official campaign spots in which “the vote is not asked for” is not understood. He also raised doubts about who the generals and colonels will be accompanying a future President Milei, whom he noted was not De la Rua.

Source: Ambito

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