Wednesday, November 20, 2013

Argentina Turns To The Left

November 20, 2013 3:51 am

Argentina trade secretary’s resignation heralds policy shift

Argentinian Secretary of Domestic Trade Guillermo Moreno gestures during a meeting with Argentine and Brazilian businessmen at the Federation of Industries of Sao Paulo State (FIESP) in Sao Paulo, Brazil on May 8, 2012. The meeting was organized to increase the commercial opportunities and about 800 entrepreneurs from both countries are taking part©Getty
Guillermo Moreno, Argentina’s powerful internal trade secretary, resigned on Tuesday, a day after a Marxist professor was put in charge of the economy ministry, heralding a major shift in economic policy.
The departure of the pugnacious Mr Moreno, who won notoriety for stunts such as bringing boxing gloves to shareholder meetings, marks the end of an era for businesses that have lived in fear of the controversial figure since he was appointed trade secretary in 2005.




His resignation follows the return of President Cristina Fernández to the public arena on Monday, when she posted a video on the internet thanking Argentines for their support during her six-week convalescence after brain surgery.
Economists now fear a jump in inflation, which is running at 25 per cent annually, according to private economists, as one of Mr Moreno’s principal tasks was to keep a lid on prices by strong-arming companies into keeping their prices low.
Mr Moreno, who was long considered the de facto economy minister, was more recently also charged with stemming a sharp decline in foreign exchange reservesby as much as $1bn a month by denying companies dollars to import goods.
With Mr Moreno out of the way, the promotion of Axel Kicillof to economy minister on Monday makes him theundisputed captain of economic policy, already having amassed considerable power since he was made deputy minister last year and placed in charge of the nationalisation of YPF, the state energy company.
“Instead of interventionism in the form of bullying, threats and phone calls, we will have interventionism with rules, regulations and controls. Not much to celebrate,” said Federico Thomsen, an economist in Buenos Aires.
Even so, analysts predicted a rally in Argentine bonds and the local stock market, where prices fell following the promotion of Mr Kicillof, an expert in Keynesian economics who sports Elvis-style sideburns.
Markets would have further reason to cheer if a new and more credible inflation index is implemented. Mr Kicillof himself has publicly criticised Indec, the state statistics agency, as well as the International Monetary Fund.
Mr Moreno has even slapped fines on private economists for estimating inflation data well above official statistics. He is now being prosecuted for “abuse of authority”.
Alfredo Scoccimarro, government spokesperson, said on Tuesday that the president had accepted Mr Moreno’s resignation, which will take effect on December 2, and had appointed him economic attaché for Argentina’s embassy in Italy.
“There was just no more room for him to keep on wreaking havoc,” tweeted Ricardo López Murphy, a former economy minister, who nevertheless finds it “hard to believe” that Mr Moreno’s departure will do much to relieve Argentina’s barrage of economic woes.
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  1. ReportB = f(x) | November 20 1:18pm | Permalink
    A Bad Model

    As Argentina has gone. so goes America (
  2. ReportRABLondon | November 20 10:27am | Permalink
    Dead cat bounce.
  3. ReportLatin Analyst | November 20 9:19am | Permalink
    Exits unhinged Moreno, enter Marxist Communist Kicillof.
    Nothing will change but the style.
    Markets live on hope. In this case on dreams.
    Change will ocurre at the earliest by 2016.
  4. ReportThinkofitthisway | November 20 9:09am | Permalink
    Perhaps Moreno has a future as a hitman for the Italian mafia. They must have sent him there for a reason.
  5. ReportRory Keelan | November 20 8:52am | Permalink
    Probable a case of 'anyone but Moreno'
  6. ReportCharles Robertson | November 20 7:23am | Permalink
    It would be interesting to hear the analysts explaining why the stock market should rally with a Marxist economy minister.