Socialist Indicted in 11 Corruption Cases Win Argentina Primary

-edited

President Mauricio Macri of Argentina was unexpectedly trounced in primary elections. The Left "won" the primary.

The New York Times reports Argentina’s Macri Trounced in Primary by Voters Angry Over Economy.

The results were seen as a vindication of Mrs. Kirchner’s comeback plan, which was met with surprise and skepticism when she announced it in May. The deeply-polarizing former leader, who has been indicted in 11 corruption cases, tapped Alberto Fernández, a more moderate politician, to run as president.

Analysts said Monday that they saw little room for Mr. Macri to recover, warning that the electoral loss would only worsen the economic problems that have dogged his administration.

“This is irreversible,” said Lucas Romero, who runs Synopsis, a local polling firm. “Beyond the numbers themselves the result will have an impact on the economic situation that will prevent the government from changing people’s perspectives.”

Argentina’s currency fell, and its bonds and stocks plunged as investors, who had put significant faith in Mr. Macri’s belt-tightening efforts, braced for the possibility of a victory by Mrs. Kirchner.

Critics accuse her of overseeing a deeply corrupt government that distorted official economic figures and relied on a patchwork of unsustainable subsidies and social programs to retain political support.

Triumph of the Left

The Wall Street Journal reports Argentine Peso Dives After Populist Peronists Gain Edge in Vote.

  • The peso initially weakened more than 30% against the dollar after pro-business President Mauricio Macri was dealt a resounding defeat in a primary election Sunday against Alberto Fernández, a leftist whose vice-presidential running mate is former President Cristina Kirchner, a firebrand nationalist. The peso later recovered some ground.
  • Argentina’s central bank stepped into currency markets Monday, auctioning off $50 million to try to support the peso. The bank’s benchmark interest rate jumped to 74%, from 63.7% on Friday, according to local reports.
  • The Merval index in Buenos Aires closed 38% lower on Monday after jumping 7.7% Friday on expectations that Mr. Macri would come in a close second place in Sunday’s primary, a mandatory vote that determines which parties will be able to run candidates in the October election.

Via translation from German, please consider the Triumph of the Left-Wing Populists Brings Stock Market Crash to Argentina

Vote of No Confidence

Hooray for the Left!

Mike "Mish" Shedlock

Comments (25)
No. 1-10
2banana
2banana

The people voted for socialism and corruption.

And they are going to get it - good and hard.

Maybe Bernie and Warren can fly down there and show them (and Venezuela) how it is done with the right people in charge.

Mish
Mish

Editor

You left off AOC - Send her down there too - and of course Jeremy Corbyn

Latkes
Latkes

The Kirchners came to power in 2003, after the Argentine economic collapse. During their reign (2003-2015), the GDP per capita has quadrupled. Even though this has been caused partly by simply reaching rock bottom in 2002 and partly by commodity boom and then worldwide ZIRP, I can't blame the Argentines for wanting more.

OTOH, Macri's reign brought accelerated devaluation of peso in a much shorter time than during Kirchnerism.

I am not endorsing one or the other. I am simply stating how things look from the point of view of an average Argentine.

AWC
AWC

BTFD ? 🤡

shamrock
shamrock

The chart really adds some perspective. Yes, it's a horrific crash, but it takes the values back down to where they were 4 months ago. There was an incredible 50-60% YTD gain.

3 Replies

2banana
2banana

You are correct on the Merval Index (which is the DOW Jones index for Argentina) just crashed 35% - but still is positive going back to April, 2019.

However, the currency also crashed 25%.

That is a 60% haircut in ONE DAY for any foreign investor in the stock market.

Add in if you own any Argentinian bonds - you took another 25% haircut.

And did I mention inflation is running at 35-55%?

So basically - the average investor (and especially foreign investors) are well down the road to being wiped out.

Bam_Man
Bam_Man

This is Zimbabwe/Venezuela-like stock market math.

2banana
2banana

And the best strategy is "not to play..."

abend237-04
abend237-04

For anyone still thinking that socialism and protectionism won't wreck a modern, prosperous nation, Argentina, since 1930, has been a cautionary tale.

Mish
Mish

Editor

"The chart really adds some perspective. Yes, it's a horrific crash, but it takes the values back down to where they were 4 months ago."

No - Much worse Factor in the Peso

Lost_Anchor
Lost_Anchor

PLEASE... can we all pitch in a few bucks and buy Bernie, Warren and AOC one way tickets to the socialist utopia of Argentina? I'm OK if the three idiots want to get off the plane in Venezeula or Bolivia. Socialism has the same result everywhere.

Have to wonder what sort of dumb pills their supporters are taking

NPLopez
NPLopez

Lol, whinging about socialism forgets that Macri failed to improve the situation. It's silly to be shocked that ordinary people are "punishing" Macri when his "solutions" have punished ordinary people while having no effect on the economic situation.

Cutting taxes, slashing subsidies, and pushing for international investment isn't going to magically create jobs or improve the economy.

Casual_Observer
Casual_Observer

More on corruption: