He did not expect a calm walk knowing the public personality that the libertarian president, but from there to stumbling and with ups and downs in the course is another strong dose of uncertainty that is injected into investment decision makers. The questions continue. Answers are scarce. But at the end of the day everyone wants to know if Javier Milei you must take care of the Ides of March. We will see. For now, today it seems that the President with the beginning of the period of ordinary sessions in Congress will begin the most complicated stage for the libertarian management.
After his raid through the USA, Milei faces its most serious political-institutional crisis before completing three months of government. The eventual alliance with Mauricio Macri It is a political issue but a conflict between the PEN and the governors over resources is an institutional problem that affects the federal system and has political consequences, market men with several lobbyists and political scientists warned in a City basement. As usual, the Torres case It was an imponderable, and a crisis that escalated due to miscalculation, for half of the library.
Milei, who arrived with the credit of a large sector of society, will have to deal with the strategy of the parliamentary opposition and the governors who await him with several accumulated bills and growing distrust. Furthermore, at the tables they ask themselves, to the sound of the increases and tariffs, what is the tolerance of that heterogeneous 56% of votes on which the Government relies to advance with its plans. To what extent are they willing to sacrifice themselves? March is almost a turning point. She started the high season of complaints, strikes in the middle of the start of classes and wild parity.
According to financiers close to Olivos, tEveryone is worried about the sustainability of the adjustment, even the top officials of the IMF. who during their recent visit to the country demanded greater political support (enforcement) for the proposed changes so that they can be perceived as viable over time and finish leveraging the bases of growth. Everyone is concerned because the numerous battle fronts that the Government has open suggest that this is not within its objectives.
Yesterday in a financial roast On the ground floor of San Isidro it was commented, despite Milei’s secrecy about the content of his speech – that an economist close to the President said he began designing it after his return from the US – that a good part will be focused on the inheritance he received from Alberto Fernandez and an overview of the political and economic situation in Argentina. There it was concluded that the strongest issues will be those of economy and security. The rest will be pour the gallerythat is, the show of the deputies, who stays, who gets up, in case the President reiterates insults or grievances against the legislators, and other Creole condiments.
Another high season that will begin in days will be the monthly meetings of the City’s main gurus with clients and colleagues. But in the meantime, in the few virtual and in-person meetings such as in the Investment & Business Forum of the MegaQM management company in Mendoza, which has also organized a workshop on “Macro 2024 Perspectives for better investments and financing”, given by the director of EcoGo, Marina Dal Poggettoor that of Compass after its raid through Miami and San Pablo, in which they participated, among others Amar Regantifrom Wellington Management, and Michael Power from Ninety One, in addition to the hosts Eduardo Venezian Concha and Juan Miguel Salerno.
In the coffee break It was commented among Balcarce 50 regulars that the President is really optimistic about the timing of the fiscal adjustment and the chances of a recovery of the economy starting in the middle of the year. Some already suspect a certain effect “Irigoyen diary” given that no one brings him bad news or comments from the establishment about the political and social viability of the adjustment and the magnitude of the impact on the real economy.
For Milei, according to financial interlocutors, The population continues to trust and is convinced of the direction even without the Bases law and without DNU. In this regard, they highlight that the flag of fiscal policy is not negotiable. They expect that February will also bring good results in public accounts, but below January since the recession in collections is felt. One piece of information that a manager provided and that is causing concern was the estimate of the debt that the distributors accumulated until January with CAMMESA of almost $400,000 million due to the tariff freeze.
Before, the State was in charge of transferring funds to the administrator of the wholesale electricity market so that it could fulfill its commitments, but now Don Toto It seems like it doesn’t cost much. A lot of noise in the payment chain between generators, transporters and natural gas producers.
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The one who is not affected by the recession is the group of WhatsApp “Our voice-dollarization” which brings together several CEOs who reach the President and in which in the last comings and goings there was an exchange of criticism and passing of bills. It seems that he changed his enthusiastic mood to a more cautious one. It seems like deja vu of the kind that prevailed in the Macri era, not only because several members are the same but because La Rosada asks them for more support for the cause.
The background is that these CEOs, like the red circle, know that saying this experiment should turn out well is not the same as saying it will turn out well. Fear of risking a leap into the void. Don Toto heard complaints from these businessmen about the sustainability of the fiscal plan and looks askance at Federico Sturzenegger who seems to be in the pits waiting.
In another gastronomic-financial meeting, the two paths that the official exchange rate has in the coming months were evaluated. The diners concluded that the crawling peg, closer to 8% monthly or a jump is made to unify in the III quarter. It is worth remembering that Milei confirmed days ago that it will move to a flexible exchange rate regime, maintaining the peso, at least in the first stage (perhaps that is why the idea that printing currency has criminal consequences). But if there is a disbursement from the IMF, times can accelerate.
They believe that in addition to the exact moment of unification, it is very likely that the Government will sequentially relax norms for testing, as it did with the soybean-MEP dollar restriction. While the Rofex, continues to launch products (such as futures with delivery and settlement of merchandise based on the Export Dollar index) the prices continue to reflect market confidence. For its part, the BCRA continued buying at the expense of exchange restrictions, but also thanks to the trade surplus like the one in January and thus canceled debt with the BIS.
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At the foreign banking tables they closely follow the scandal linked to the Artificial intelligence and the collapse of a bank on Wall Street. Regarding the banking issue, once again the specter of the banking crisis hovers with the new fall of the US regional bank New York Community Bancorp (NYCB) after now recognizing that it has internal control problems, reformulating its accounts and changing its CEO. The stock collapses 30%. This bank had been left with some assets and liabilities of the failed Signature Bank.
The other scandal is the investigation by the US SEC to clarify whether investors of OpenAI were deceived when the startup’s board of directors temporarily removed Sam Altman last year for alleged lack of candor. The SEC is examining the CEO’s internal communications and seeking internal records of current and former officers and directors of the creator of ChatGPT. We will expand.
Source: Ambito
