By Bianca Fernet, The Bubble:
If you happened upon Argentine President Cristina Fernández de Kirchner’s Cadena Nacional, her equivalent of the state of the nation address, you’re likely wondering what the hell that was.
President Cristina Fernández de Kirchner is upset. Very upset. Very, very, very, very, upset. Whether or not she is pretty on a regular day is arguable, but she competes with Bruce Banner when she gets upset.
Yesterday, one day after Judge Griesa declared that Argentina was in contempt of the court, Cristina spoke on Cadena Nacional. It was her most anti-US message in, well, ever.
It was a little out there. Conspiracy theories abounded. She targeted the US, local businessmen, the farming sector, and anyone who may not bow before her. She went so far as to accuse these groups of all conspiring together to bring down her administration, topple her government, and destroy this country.
Her most controversial statement came at the end, when she brought back the alleged threat that ISIS made against her [Reality Check: Is ISIS Really Going After Cristina?]. Not only did she suggest that ISIS has made no such threat, she implied that it was all a cover story created by the United States to eventually assassinate her and then blame it on some Middle Eastern terrorist.
So there you have it. Cristina’s political tin foil hat remains in place, and at this point we’re having severe difficulty discerning reality from her far-fetched fiction.
Her hour-long festival of insanity included these delicious morsels:
“The problem here is not the economy or society. It’s some powerful sector who want to topple this government.”
“I want to tell the Argentine people that I’m not angry,” she said, totally furious.
“These are not isolated decisions made by a senile judge in New York. I will not give in to this provocation. These are vultures that resemble the eagles of the empire.”
“They are trying to ruin the debt restructuring process. Griesa doesn’t even know what the law says in his own country.”
“Things have never been as ridiculous as they are now.”
“I wasn’t surprised by (Griesa’s decision).”
“Maybe they’ll have me arrested next time I go to New York.”
“The US State Department warns about drug use in Argentina. And how are things at home?”
“I hope I’m wrong when I say that some sectors want to topple this government, and they intend to do it with outside help. I have no doubt that this is the case.”
“If something happens to me, don’t look to the east, look to the north.”
Throughout the diatribe, Cristina accused the banks of manipulating the exchange rate and ordered the Economy Ministry to initiate proceedings against them. She criticized soy producers and automakers, accusing them of speculating on a devaluation and hoarding their stock rather than selling at a loss.
She accused Juan Carlos Fábrega, until that moment president of the central bank, of passing privileged information to private banks and participating in underhanded tomfoolery designed to bring her otherwise thriving economy to its knees.
Shocking no one, Mr. Fábrega promptly resigned and has been replaced by Alejandro Vanoli, who was until today head of the Comision Nacional de Valores (CNV).
Cristina accompanied the dragon-esque fire breathing with implied draconic policy changes to come.
The CNV will be inspecting banks and stock brokerages known to use bonds to move money at the unofficial rate (aka contado con liquidacion or the blue chip swap). This is not good news for anyone in Argentina operating a legitimate business (or an illegitimate business for that matter) that uses bonds to legally bring funds into the country to finance a project, or uses the same manner to repatriate funds.
But it’s hard to do business when inflation is, as economists suggest but no one knows for sure, as high as 40%, when overnight currency devaluations are part of the deal, and when capital controls ruin your day.
Cristina’s angry paranoid rant makes for excellent comic fodder, but it makes for a very poor economic prognostic.
Argentina’s predicament is not the fault of the banks, speculative traders, Juan Carlos Fábrega whispering secrets into the ears of investors, automakers stuffing unused vehicles with unsold soy to hoard, sinister forces within the US government seeking to destabilize the region, or cruel vulture funds.
It is the result of a system of unsustainable, populist economic policies that won votes by promising impossibilities.
And so it appears, we are reaching the climax (por fin) of this scintillating saga of what happens when populism and socialism boil over in the Republic of Argentina. On Wednesday, the Merval stock index plunged 8%, and on Thursday it plunged another 7%. Laissez les bons temps roulez and let the good times roll. By Bianca Fernet, The Bubble
You know that soul-shattering moment when reality hits? That’s what I felt when it was announced that Cristina Fernandez de Kirchner was to meet with George Soros. Read… Sting of Betrayal: George Soros and Cristina Kirchner