OT? What's the view from Argentina?

Investment Analysis Clubs Macro Economic Trends and Risks
1

Here’s a recent YT. 35 minutes. I speed listened; 1.5x. If there was a point that caught my attention, I rewound.

The first 20 minutes are a recap of how Argentina got to the point of electing Javier Milei.

At 22:30 Milei’s views of the Central Bank.

The final 10 minutes focuses on Milei, especially starting at 26:30, the YTer claims that after only 1 year of austerity Argentina’s economy is booming.
Predicting 5% GDP growth.
Cut government spending deeply.
First fiscal surplus in 14 years.
Inflation down from 200% (?annual?) to 2.4%/month (30% annual?).
Cut government work force by 10%+.
No govt contract renewals - more workers will lose jobs.
Froze govt wage increases.

Poor people.
Froze pensions
Cut subsidies.
Initial rise in poverty rate 42% to 53%, but in H2 2024 dropped to 37%.
Officially, 7M “escaped” poverty; Milei says 9M.

Cut government regulations, which Milei says stimulates the economy.

I see parallels between what Milei has done in Argentina and what’s being attempted here in the US.

Caveat emptor for YT information?
The YTer is “Business Basics”. IDK if it’s legit or not.

IMO, YT, in the last six months has dramatically DECREASED its “signal to noise” ratio.
It is becoming much less useful for “reliable” content.

In addition, in the last month the number of ads has dramatically INCREASED.

:carousel_horse:
ralph

1 Like
2

I am truly impressed that Millei has done this well this fast, and hope it continues. The normal cycle would be for a true time of success, and then another round of plutocratic looting followed by another round of idiot angry populist looting followed by a rebloating of government jobs, salaries, and corruption.

I pray not. I love Buenos Aires, the Pampas, Patagonia, and the delightful but seemingly permanently crazed Argentine people.

1 Like
3

Except, you know, when banks start giving loans to strippers to buy a six pack of houses.

Or corporations use monopoly power to disable competition.

Or aircraft manufacturers start using substandard parts in airliners and they crash.

Or when health and safety standards make people more comfortable with buying products.

Or when predatory pricing or ‘tying’ is employed to drive competitors out of business.

Or when banks are required to keep safety reserves to prevents bank runs

Or when ocean liners have to have enough lifeboats to serve all customers once at sea

Or when advertisers are compelled to be truthful instead of deceptive

Or …[list continues for 1001 other regulations which aid consumers]…

But sure, just whip out the chain saw. No problems with that approach, apparently.

5 Likes
4

I suppose it depends upon the density of the jungle.

Don’t know much about the Argentine situation, but in Europe even the EU recognizes that it is over-regulated. In December, Mario Dragi (former head of the European Central Bank and ex-prime minister of Italy) put out a 400-page report on EU competitiveness. It wasn’t pretty and there was plenty on regulation.

Meanwhile, Draghi’s comments on regulation will likely face most resistance from within the Brussels machine itself. He notes that 60% of companies in the EU see labyrinthine regulation from Brussels as a barrier to investment and innovation. While the US federal government passed 3,500 pieces of legislation and 2,000 resolutions between 2019 and 2024, the EU added 13,000 regulations in the same period. Still, arguments about competitiveness are unlikely to sway those Eurocrats who draw so much of their power and authority from zealous regulation. Indeed, Brussels’ great ambition is to become a ‘regulatory superpower’ – that is, to be the setter of rules for vast swathes of the world. EU apparatchiks may boast of their ‘landmark’ and ‘world-leading’ regulations on tech, but where are the large homegrown, innovative tech firms Europe needs if it wants to drive economic growth? Regulating for regulation’s sake is what Brussels does. Challenging this will be a tall order.

DB2

3 Likes