Macri’s Folly @FT

Headline:Argentine peso sinks to new low as sell-off resumes

Sub-headline: Decline comes despite central bank raising interest rates to 40 per cent
4  hours ago

Markets need to see a radical tightening in fiscal policy in order to stabilise the situation, and that includes cutting wage hikes in order to fight inflation. The next step would be to ask the IMF to come to the rescue.”

Chile’s peso is off 1.3 per cent lower, the Polish zloty has fallen 1.2 per cent and the Mexican peso is off 0.9 per cent. The Russian rouble, the South African rand and the Brazilian real are all at least 0.5 per cent lower. The euro was down 0.6 per cent at $1.1932, while the pound dropped 0.3 per cent to $1.3511.

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Headline: Argentina’s ‘shock and awe’ appears to pay off

Sub-headline: Investors have taken comfort from central bank action, but Turkey is struggling

5 hours ago

Argentina’s drastic policy actions appear to have paid off. Last week, the country was on the ropes.

After monetary and fiscal policy mis-steps, the Argentine peso fell to a record low and the country’s debt tumbled in price. Its 100-year bond — issued almost a year ago and lapped up by investors hailing a new market-friendly government — sank from 94 cents on the dollar last month to a low of 83.1 cents. But a series of substantial interest rate increases and a promise to reduce the budget deficit more quickly have helped stabilise markets, with the “century bond” holding just below 87 cents on the dollar on Tuesday in London. Both Payden & Rygel and T-Rowe Price — US investment groups that bought the century bond when it was sold — say they have taken advantage of the rout to buy more Argentine debt.

@FT What is the Neo-Liberal Party Line on Macri’s misbegotten ransom payment to Vulture Capitalist Paul Singer? Shock and Awe or Welcome to The Neo-Liberal Collapse? 

Almost Marx

About stephenkmacksd

Rootless cosmopolitan,down at heels intellectual;would be writer. 'Polemic is a discourse of conflict, whose effect depends on a delicate balance between the requirements of truth and the enticements of anger, the duty to argue and the zest to inflame. Its rhetoric allows, even enforces, a certain figurative licence. Like epitaphs in Johnson’s adage, it is not under oath.'
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