The three -step menu of the DC for rescue. What would be those recommendations? Milei’s strategy according to a survivor of several crises. Will he be able to negotiate, or have he the ability to negotiate? It is the big question between managers and investors.
“From afar it is not seen,” says the anthem of lice, however, it seems that from close either. This is what they understand abroad, he explained, minutes before the opening of business, a prestigious analyst in a traditional meeting that historically took place in a reserved of a subtraction of Palermo Chico. Given the level of the participants, the information crossing did not give an exhaustive analysis in time so everyone tried to clean the straw of wheat and take hard conclusions to the operations tables. The prevailing moody, or to talk about the trainers in the future dollar, about those who say there are well-known injuries with important losses, does not give truce and at the tables they understand that the ruling party, almost without bullets, or reserves, played their last file to the plenary of 14-O. That day will take place Javier Milei’s first visit as head of state to the White House. The long -awaited invitation that the Argentine president was waiting for last year will finally be realized, although in not so good circumstances, Both for Milei himself that he suffers a exchange and financial crisis as well as for the homeowner, Donald Trump, checked by the pressures by the cutting of the Government (“Shutdown”) and the various fronts and open conflicts that the Republican maintains at domestic and international level. After the comedy pass that was the meeting of both leaders at the UN and the subsequent surprising announcement of the Treasury Secretary, Scott Besentfrom the rescue to Argentina and then the comings and turns, and without the money or the details of the “agreement” of rescue, the stampede of the Argentine assets continued, said the head of the table of a leading bank to his superior abroad.
In said exchange, It was discussed, how much the exposure to Argentina was promoted by North American investors, as a reference of the US $ 20,000 million swap that Besent announced and the possibility of buying Argentine bonds. As explained by Wall Street, the “Info” of the Treasury Department itself, on the possession of long -term foreign assets in the portfolio, in the Argentine case, American residents had about US $ 19,000 million, approximately half sovereign bonds and the other half corporate bonds and actions. To have a dimension, they told him that it represented about 2% of the total foreign assets in the hands of Americans. A no less fact: although the possession of Argentine assets had grown significantly since the arrival of Milei to La Rosada, most of it was not due to new positions but for the valuation effect, since In the almost two years of the libertarian, the net purchases of the “Yankies” barely added US $ 1.5 billion when the price effect resulted in an increase of almost US $ 5,500 million. Why so much interest in this data? Is that for the Wall Street table it will be a reference how the mix of net shopping and valuation effect evolves to know the appetite of US investors for Argentine assets.
Before cutting the “Conference Call” they asked him how they saw the Argentine situation from the big apple, and the consensus is that “Everyone” hopes to see something at Washington’s summit, because the traffic until 26-O will be frighteninghence some ironic to raise if they reach 14-O, given the bullets that remain in the “Toto” bedroom and its partners. In this regard, in several meetings of people on the market, various versions were heard about the fate of the “best minister in history”, but in a particular one, one of the true and genuine Guru of the City of Buenos Aires, which precisely does not use a hat, commented that from a New York background with links with Don Scott they transmitted that The Department of the Treasury had already begun to speak with the IMF about Argentina, and that they had also heard questions about potable successors of the “Toto”. Obviously, he did not filter any name, at least the clients who listened to him.
Dollar Caputo
Counterpoints about the “Agreement”
There was not much time for gastronomic meetings so local players took advantage of each meeting to dimension the tenor of the pulse, that a consultant close to the ruling party described, among friends, as a huge and very heavy pressed between stocks in dollars and pesos. Today everything returned to hyperinflationary times in terms that is day by day, cannot be planned beyond. Everyone’s head is on the night of 26 and who will be victorious, but until that night several business wheels still remain and everything can happen. In one of those early meetings, there was a friendly counterpoint among one of the most listened to political analysts and a consultant with arrival in Olivos about the “agreement” with the US. There was coincidence that, apparently, Washington did not ask for anything in return. However, one of them argued that the US decision responds purely to a geopolitical issue while the other, which usually manages good information, conjectures that, in reality, given such political support provided by the Trump administration to Milei, something historical that not even Frondizi or Mene had had, There were a few “recommendations”, not commitments or demands, but mere advice, say, according to the interlocutor.
What would be those recommendations? One has to see, precisely, with The geopolitical chess game, and involves Chinaand it would be the “convenience” for Argentina to remove the Asian giant from their influence in the region. Another, the key, or rather, essential, to win the mid -term elections. And finally, but No less important, make the necessary alliances to guarantee governance. This Triad would be the basic three -step menu for Washington to decide the effectiveness of the rescue, because already with photos, or tweets, no meetings calm down to the markets. In that context, another very respected City man on Wall Street and London, where he knew how Support for Milei. They saw that the situation did not give for more, Milei was not going to be able to continue ruling like this. That’s why, In the three -step menu of the DC, the plate of alliances appears. It is that the current panorama where the ruling lacks the famous third in one of the cameras to defend the vetoes has almost become the Holy Grail.
But that is not all, according to the vision of the outside, because now they see that Congress also checks the instrument of the DNU. In this regard, the political scientist explained to those present that Milei’s strategy was to govern the remainder of the mandate with veto and DNU, so that, if he no longer has veto power and the DNU trained, it would be an invalid duck more than Rengo. What would be the rosada movement? According to this survivor of several crises, whose name came to be heard for a ministry in the nineties, Milei’s strategy would be to endure until 10-D, that is, lock the process of the law that regulates the DNU until that moment, because then the extraordinary and only the projects of the Executive enter. After all, said the president’s confidant consultant, everything opts that “Javier” negotiates, fundamentally, with the governors, who can discipline Congress, or at least, in these times they have influence on legislators, and in parallel rebuild the basis of governance with all non -Peronists. But will you be able to negotiate, or do you have the ability to negotiate? That is the big question among managers and investors. As an analyst who knows power well, it is difficult to think that Milei changes personality, but also does not have much margin.
In another point between managers tables he set a lot that Milei has brought history in such a crisis, mentioning that he wanted to make a blow like De la Rúa. For the most seasoned analysts this was a serious mistake of Milei. If something did not want to listen to the market is the history of Alfonsín and Rúa’s crises that are reference, precisely by the combo: electoral defeat-discontrol of institutional markets-fragility. The memory is present and the Central Bank and the Treasury do not have much ammunition and they all know them. On top of that, the economic team does not stop making mistakes and swords of drowning, which they criticized so much in other governments. Anyway, it is believed that until after the elections there will be no changes in the cabinet. However, Milei is emotionally prepared, according to relatives, to change a minister, but not the entire cabinet as claimed.
Questions and “shock therapy”
Between so much data and speculations, a newcomer from New York where he accompanied the UN General Assembly, commented the counterpoint between the Jesuit priest Rodrigo Zarazaga and the former IMF economist, Alejandro Werner, in Georgetown on the Argentine case and the Milei-trump relationship. Not only did they discuss the change of political and economic perspective of Argentina under the presidency of Javier Milei, but about the “hard blow”, thus qualified, to the results of the recent elections in the province of Buenos Aires for the Freedom Party Avanza de Milei, an electoral defeat that many interpret as a sign of the loss of support to their libertarian agenda. There was also talk of the US $ 20,000 million SWAP of the Treasury, the possible purchases of Argentine debt and a Stand By loan, to underpin Milei’s reformist project and stabilize market confidence. The main questions were if the electoral setback of Buenos Aires reflects tactical resistance to austerity, ideological fatigue or a change in the priorities of the electorate, also if Milei can continue promoting its “shock therapy” reforms despite the weakening of political backing, and if the US support It will be a enough mattress to avoid liquidity crisis and preserve the impulse of the reforms. All very opined. The newcomer also told some clues of the event organized by Arcap and Ala in New York, in the Argentine consulate, of which important investors and men of the “Venture Capital” business will participate to explore the forces that attract international capital to emerging markets and highlight the strategies and lessons of Latin American companies that have successfully climbed in the US market. Some of those who will be are Mariano Mayer (Newtopia VC), Martín Umran (Globant), Alejo Czerwonko (UBS) and Jacques Bléhaut (Beta Impact VC), among others.
Source: Ambito
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