Yeah, yeah, I know but there isn't anything else out there unless you're interested in some comparison of the spread between the 10 year Bund/Note. I've always felt there was a spread and that was enough knowledge for any point in time. But there was an election in Argie and yesterday and the results, while perhaps not shocking, were at least very, very interesting and encouraging inasmuch as the bad guys didn't win out right.
Scioli got a plurality but not a big enough one. Macri came in a very close second. Now this might sound like a Bocce game a block off Arthur Avenue but this Romanesque face-off might actually prove to be important and a precedent for things to come. Scioli, the governor of the Provence of B.A. was President Kirchner's and the Peronistas' boy; Macri, the Mayor of B.A. and the darling of the business mob hadn't been given a chance. But, the votes being taken from the left by a third party candidate, we are now looking at a run-off election and it is, as they say, a whole new ball game.
To paraphrase the great American writer of the last century, "The election does not always go the most organized, or the crook who buys the most votes, but that's the way to bet." The Peronistas have been buying votes for 60 years and are organized in every street in B.A. so that's where my money would be but the closeness of this result indicates that the loonie left in Argentina and by extension, the rest of Latin America may not be the overwhelming force as portrayed by the New York Times. Argentina's economy is a mess aside from the ridiculous 11 year battle with the hedgies. With global commodities still in the dumper now is the time to consider some serious reforms and that may be the message to all involved...which of course will be ignored should Scioli prevail. Just too many mouths to feed and pay-offs to be made to run an honest brokerage. But it was a wake-up call no doubt and we shall see what the next few weeks bring.
Interestingly enough, even Scioli was making noises about getting the country's fiscal condition in order highlighted by n attempt to resolve the hedge fund issues which have resulted in Argentina being completely unable to access international capital markets in any size. Not surprisingly, the jabber today was all about Argentina's ability to return to the markets if a settlement ensued from either side's election in the run-off. The Emerging Market guys were almost unanimous in their belief that at the right time with the right price Argentina could return proving once again that P.T. Barnam was the smartest investment banker of all time...or maybe it was Charlie Schultz, the creator of Lucy and her football...which is pretty fast company when you're up against the folks who run Vanguard which is wearing over 50% of the debt of the Ukraine that isn't due to Russia. Wonder what they lost in Argentina's fifth (sixth?) MAJOR default in it's borrowing history? Don't even start talking about the States, Municipalities or Corporates. You're heading for triple digits with those.
But here I am, forced to write about the Argie-bargies as the financial horizon stays empty. There is a Fed meeting this week; a rate rise perhaps? That will be right up there with a Macri win. Hey, you never know.
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