What is said at the tables: everyone against the blend dollar, and “déjà vu” of the Letes in dollars

An uncomfortable level of uncertainty: those who see it and those who don’t

Hot and tumultuous days, only cushioned by the honey of the bleaching effect. The Government is confined to its hard core of the faithful third who voted for it in the first round. He failed to deactivate, under the promise of covert funds, the university march. Now he hopes and bets that the economy will rebound in the middle of next year, a key time for the elections. This is how the market sees the “momentum” while companies and banks prepare budgets for 2025, under an uncomfortable level of uncertainty, even though the economic team and the President say that everything is on track. The only thing they consider is the fiscal anchorage but they want to see more. AND If there is a “bad guy” in the movie today, it is the blessed blend dollar that conspires against the accumulation of reserves of the Central Bank (BCRA). The main market consultants describe it as criminal and unsustainable.

Meanwhile, Investor Days emerge throughout the city of Buenos Aires and where in one of them, a legendary guru who knew how to work with the current President before his time at the América conglomerate, explained that in relation to those who did not see it and those who see it, it was very simple: compared to those who see it, that is, those who, for example, say that the dollar is not behind and it would be suicidal to devalue, in reality they think as the market as a whole thinks that it does not You see it, you think that the things that the Government and the economic team are doing are done because they are thinking about something else to do. That is, that There is more than this, because otherwise there is no tomorrow.

Another influencer noted that the difference between Macri and Milei was that in 2016 a good bridge was being built but they did not know where to go, but now, they know where to go, or so it seems, according to the cluster of projects under analysis, but there is no bridge.

Change the ranking of society’s concerns

What else is being talked about at the tables right now? Laundering more, laundering less, the number that is projected is pleasantly surprising, although unlike previous experience, it is not believed that the BCRA will end up benefiting via an increase in reserves due to higher reserves of argentollars.

Those who look at the polls, now vilified by the Government because they show that the level of popular support has dropped, which is true, which also explains the change in the official political strategy seen in Parque Lezama days ago, see the strong growth of the tariffs and employment issue in the ranking of concerns of society that now expresses less concern about inflation. The surveys show that the problem itself is one of income, the impoverishment of family income rather than an employment problem, which translates into more poverty and destitution. Today they know at the tables that with this stock of dollars they will not reach the 2025 elections. That is why the market looks at four things: the fiscal numbers, the future of inflation, the BCRA’s dollar purchases and what the Bases Law advances. Thus they project, let’s say, three scenarios, one of exit from the Blend with devaluation but maintaining the stocks, another of exit from the Blend but without devaluation with some adjustment in withholdings and another of exit but with exchange rate unification. We will see. All this explains the discursive swings of Milei and Toto Caputo regarding the release from the stocks.

There is also talk of the famous REPOwhich according to the most informed, this time would come out but not as the Government wants, for much less money, they say of about US$3,000 million under the leadership of the Spanish bank and the exNomura team. The dreams linked to gold were left behind, after the Economy and the BCRA announced that if they gave it as collateral they had to take it out of the gross reserves.

Whitewashing: fear of the clutches of Toto

But speaking of laundering, the market run-run is the fear that the apparently successful laundering of cash will be at the expense of the clutches of Toto. At the tables they fear for the return of Dollar Bills. Better that Toto has learned something, say the operators.

At a table the information was circulated that the Tesla strongman and friend of the President would come to visit at the end of November, which would be important for the ruling party, while waiting for Trump to triumph on November 5. When questioning the shift towards China, a manager and confidant of Olivos pointed out that according to the libertarian he did it because Beijing did not ask for anything in exchange for the renewal of the swap. We’ll see, for now this turn takes away its seriousness abroad, not only in the US but also in China.

Inflation is seen stagnating at more than 3% and there is concern that the Government will make a mistake to accelerate the desired decline. Many, many suspicions about the tariff reductions that are taking place, awakening all kinds of rumors and speculation. At a financial lunch it was said that YPF’s raid on several Wall Street investment banks for the gas liquefaction project was of no interest, where they also talked about the National Review Institute event that will feature President Milei. It will be Andrew Stuttaford, editor of National Review Capital Matters, who has been following the Argentine case for many years and over several visits, who will debate with the libertarian along with Marcos Falcone.

Doubts about the sequence of Milei’s reforms

Regarding Milei’s visit to the UN and Wall Street, another gastronomic meeting discussed the economist’s comments Steve Hanke who said he had doubts about the sequence of the reforms that Milei has proposed despite the fact that the agenda is admirable. He said that in his experience, the sequencing and execution of reforms are critical elements that determine the success of a reform agenda: “the first step of a successful major reform program must build public trust, and each subsequent step must reinforce that confidence and build momentum for reforms. Reform is largely a game of momentum. Without proper sequencing and execution of reforms, momentum will not be generated and the pot of gold at the end of the rainbow will never be reached.”. Hanke further argued that in Argentina there is a lot of unnecessary confusion about currency competition and dollarization, and much of that confusion has been created by the chatter of Argentine economists and President Milei himself, since dollarization and currency competition should go hand in hand, and should not be seen as alternative regimes, and gave as an example, El Salvador 2001. We will expand.

There was also a lot of talk about the economic team that takes over with the new president of Mexico, since there were several diners managing Latam. Who are the officials responsible for the direction taken by the second largest economy in Latin America and the 13th largest in the world?: Rogelio Ramírez de la O, Marcelo Ebrard Casaubón, Victoria Rodríguez Ceja, Jesús Antonio Esteva Medina, and Julio Berdegué Sacristán. The diners agreed on three great challenges for the Mexican economy that can mark the six-year period that begins: stop the fiscal deterioration and recover a manageable fiscal deficit as soon as possible, boost economic growth and infrastructure via “nearshoring.” In addition, the managers talked about the new bullish cycle in emerging market stocks and see four pillars that support the thesis: improving macroeconomic fundamentals, an earnings cycle, a peak in the dollar and structural trends such as the energy transition. and artificial intelligence.