Kirchner Jumps Off Deep End, Takes Argentina with Her

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

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  30 comments for “Kirchner Jumps Off Deep End, Takes Argentina with Her

  1. Manni Holden says:

    Angry or not – your “correspondent” Ferret conveniently overlooks the fact that Kirchner would not be the first – nor would she be the last – leader of a Latin American country that is taken out by the US. How hypocritical can you get?

    • Archy Don says:

      You forgot the line: “It’s all Bush’s fault.”

      • SRV says:


        btw… yes, it still is, and will continue to be irrespective of the number of times the GOP talking point mocking the truth is repeated (always accompanied by a hearty guffaw per script)

    • Neo says:

      +1 to that.

    • Wolf Richter says:

      Sure, we’ve got a glorious history in Latin America. But that’s history. Now we’re tangled up elsewhere.

      No one in the US government is spending too much time worrying about Christina. You don’t get raises for that. They’ve got other priorities. She, as a political leader, is on autopilot toward self-destruct. No involvement from the US needed.

      So not hypocrisy (on Bianca’s part). Just looking at things with open eyes.

      • HD says:

        Yes, I still remember the days the US was all too happy to undermine South American regimes that did not… , let’s say, come up to American expectations. Very dark days indeed in some cases. But I think you’re right, Wolf, the US nowadays feels it’s presence is urgently required elsewhere.

        But what is it with South American countries that forces them into a volte-face every time they start doing all right and seem to have everything going for them? I really thought countries like Argentina had finally turned the corner and would reclaim an prominent place on the world stage.

      • SRV says:


        Big fan but really… she screwed Wall Street!

        Lets get real here…

        • Wolf Richter says:

          OK, I give her partial credit for screwing Wall Street. “Partial” because she inherited the battle, and because the battle isn’t over yet, and because I’m not exactly sure who is trying to screw whom in this case….

          But I give her full credit for screwing her own people via false promises, inane policies (such as capital controls), destruction of the peso, and infliction of mega-inflation.

        • Si says:

          “she screwed Wall Street”

          Leaving aside the fact that WS are the biggest screwers out there so are fully aware of the game. In what way did she skew them? If you take a risk buying bonds you know may default then you have to eat it when they do.

          No tears from me on this one.

        • mick says:

          It doesn’t count when you screw wall street, kind of like it doesn’t count when you steal from a thief.

    • m says:

      Please give a list.

  2. retired says:

    Argentina at one time was a strong & prosperous country. That was before Juan Peron & his wife the hooker!
    Kirchner is following in their political footsteps!
    At least this time she isn’t saying that the Jooooos are conspiring against her,this time the perps are Arab Jihadists!

  3. Vespa P200E says:

    Oh yes – Argentina and Venezuela what the socialists wet dreams are made of. Led by quixotic loonies like Chavez and Kirchner, adored by the liberals and dissed by Wall St and private companies whose assets are taken at will or “nationalized”.

    Sadly this once great country USA and much of EU is heading straight into socialist nirvana where the middle class is getting squeezed while the 1% fatcats do well and poor demand more government handouts including the illegal aliens – oops politically correct term is “undocumented” or something.

  4. Korkin says:

    According to degree of hysteria and unsubstantiated, statements of Mrs. Kirchner are quite comparable with the statements of Mr. Obama. But hysteria of funky woman, perhaps, deserves leniency.

  5. Bianca Fernet says:

    Hi Manni!

    Not a correspondent, just someone trying to live and work in Argentina. The US has been involved in Latin America for decades, and while many cold war plots involving toothpaste certainly targeted other leaders, I’m comfortable opining that this economic crisis is self-inflicted.

    • Tony says:

      Undoubtedly, responsibility for the underlying fiscal crisis lies with the elected leaders of Argentina. However, the resolution of the crisis – how a sovereign’s debts are handled when they become unsustainable – is a problem of international relations. Nothing is off the table in that arena. Seizure of warships, accelerated/spontaneous regime change, etc…

      If the U.N. process for setting up an alternative sovereign bankruptcy system gains traction in a direction that major Western creditors do not approve, Senora Presidente’s ravings may not be all that hysterical.

    • Manni Holden says:

      this country was sucked dry long before Kirchner was even in politics.

  6. Joe says:

    There may be an “angry paranoid rant” afoot here, but it’s not from Kirchner.

  7. KayG says:

    Wouldn’t it be fair to say its a bit of both?

  8. Beth says:

    I disagree this time, Wolf. I agree with many posters above who remember how many times the US govt has screwed SA countries. And how often has Wall Street screwed anyone they came into contact with. Please.

    And the article started with so much misogyny that its hard to know where to start.
    “President ClinObaBush is upset. Very upset. Very, very, very, very, upset. Whether or not he is handsome on a regular day is arguable, but he competes with Frankinstein when he gets upset. Sounds like Ms. Stillettos has problems with women in power.
    “She targeted the U.S….” The judge in her case does represent the US in this situation. The fact that one fat cat wall streeter can buy Argentine bonds at a discount and then when they go south, he can say to Argentina, “I will bankrupt you before I will compromise”. The Judge Griesa approves. Is there is no risk to the bondholder?

    • Wolf Richter says:

      Beth, as I said in my comment, I don’t know who is screwing whom in the case of the bonds.

      But I know she screwed her own people for the reasons I stated, including currency devaluation and mega-inflation. They’re caused by the government and the central bank. She has zero excuses in that respect.

      • Beth says:

        Wolf, I did not communicate well last night; I was sick and on pain medication, but I maintain that the Kirchner situation is very complex and Bianca’s article is a rant that does not add to an understanding of this situation. Her first concern is clarifying that she doesn’t think Kirchner is pretty and that is important in evaluating the way she handled this issue. Really this is a cover for Bianca’s need for male approval.

        • Wolf Richter says:

          I totally agree, Beth: the comment on Kirchner’s appearance didn’t contribute to anything. I let it fly because it came from a woman, and I figured it was one of those women jokes that stuck-up men like me don’t get.

          Good to know that I wasn’t the only one who didn’t get it.

          But I do think it was meant as humor, and not as an evaluation of anything. That’s at least how I’m reading it.

        • Beth says:

          I don’t see Bianca’s comment as even an attempt at humor unless you think it would be funny to talk about a man’s not being good looking as a prelude to criticizing his political ideas/speech. One doesn’t often evaluate a male politician on his looks. The comment was offensive whether it came from a man or a woman. In 2014 you more often see men continuing to make this error in logic.

  9. NotSoSure says:

    Takes two hands to clap. The voters should know that what they were promised is impossible.

  10. The problem w/ Argentina isn’t its leadership, it is the idea that Argentina can be an industrial country.

    Argentina has tried and failed to industrialize for over 100 years. How many more years of failure can the country endure? (A: not many.)

    Argentina is not a credit provider like the US, UK or Japan, because it lacks the necessary infrastructure. Credit is foundational to industrialization. If credit is lacking there is no industry even if all the other factors of production are in place. Consequently, Argentina borrows overseas funds and (mis)uses these funds as collateral for ever-increasing amounts of pesos. As the commercial banks fall underwater in their dealings with the central bank, they try to ‘make up their losses with volume’. The result is peso depreciation and inflation, bank runs and capital flight.

    Argentina cannot borrow enough overseas to develop and it is incapable of lending to itself (the system is insolvent and lacks credibility). Argentina will never be an industrial country, it needs to come up with a new, more sustainable plan that does not require credit: more of the smallest businesses, local production and emphasis on agriculture. Let the rest of the industrial world bankrupt itself.

  11. carroccio1958 says:

    it s all a storm in a teacup .

    this will be over by christmas s or moreprecisely 31 dec 2014.

    that s when the deadline expires for gruesas judgments to apply thus kirchener will then be able to pay thise mugs who accepted the haircut just like she wants to and put two fingers up to eliot nml et al who want the 100 percent .

    • Beth says:

      You have explained why you think this will happen but I sincerely hope you are right. I would vote for Kirchner before Paul Singer any day. Argentina can’t pay him in any case, so why should the other bond holders & Argentina as a whole suffer because of him.

  12. Steveo says:

    First of all, if CFK screws Wall Street who cares, they do it to us, get upside down and the Fed bails them out. I don’t cry for Wall Street!

    Secondly the Government of Argentina is not the person I want to worry about…let’s talk about the school teachers, the bus driver, the plumber, the blue color workers.…the average guy and gal on the street that sees their life getting worse as the crises continues. I am sure many posting on here have never been to Argentina so they don’t know the people, know the hardships…it is easy to preach about the woes and the poor government.

    But the upper class is protected, it is the average person who suffers from this issue. The socialist plan does not work once again…the survivors are the ones that create a little economy for themselves working around the system, they are the survivors and hero’s.

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