No, you’re not having a nightmare. The Economist explains that weird sight:
On October 6th, in the middle of his most difficult period as president, Javier Milei donned a long leather jacket, strode into a packed arena in Buenos Aires and jumped around like a rock star, belting out Argentine rock classics. The idea was to revitalise his party’s campaign for the midterms on October 26th and to remind his supporters, and perhaps himself, that his presidency was once exciting, even fun.
Lately, running Argentina has been quite a slog. On September 22nd Scott Bessent, the US Treasury Secretary, promised that America is ready to “do what is needed” to steady Argentina’s currency. That intervention was prompted by the Argentine central bank being forced to sell over $1bn in two days to prop up the peso. Mr Bessent’s promises stopped the slide, but details are scant and even Republicans are questioning the bail-out. The situation is again fraught.
With every social-media post by Mr Bessent, the peso and Argentine bonds lurch (see chart). By some estimates the Argentine treasury has sold more than $1.7bn over the past five days to support the currency. Mr Milei’s economic team is in Washington, trying to hash out the details of the bail-out and buy some calm. Yet even if they can navigate American politics, the Argentine variety may swamp them. A serious loss in the midterms would all but end Mr Milei’s radical economic reform programme.
Trump really is the bail out king isn’t he? We’re bailing out Scott Bessent’s buds overseas now too:
Judd Legum reported a couple of weeks ago:
Popular Information revealed that the taxpayer-funded bailout had massive economic benefits for hedge fund billionaire Rob Citrone, a personal friend and former colleague of Bessent. Citrone’s fund, Discovery Capital, had bet heavily on Argentina, purchasing Argentine debt and equity in numerous companies closely tied to the country’s overall economy.
Citrone’s investments reflected his belief that Milei’s right-wing economic program, which emphasizes deregulation and sharply reduced government spending, would revitalize the Argentine economy.
That theory began to unravel as growth slowed, unemployment spiked, and Milei’s popularity tanked. This spring, Citrone reportedly urged Bessent to help Milei secure a separate $20 billion package from the International Monetary Fund (IMF). The IMF funds began to arrive in April, but proved insufficient to turn the Argentine economy around.
Concerns turned into panic after Milei’s party was routed in the Buenos Aires provincial election in early September, fueling fears that Milei would soon lose control of the economic agenda. Investors began dumping the peso and liquidating other Argentine assets, which spelled major trouble for Citrone’s hedge fund.
It’s very weird in Bizarroworld. The merging of show business and politics and extreme ideology was never on my bingo card although as I look back I suppose we should have seen it coming.
It will be such a relief if we really start to see this unravel. A Milei loss would be a good start.