Argentine President Criticizes Wall Street Analyst

UNCLAS BUENOS AIRES 001309 SIPDIS SENSITIVE E.O. 12958: N/A TAGS: ECON EFIN PREL AR SUBJECT: Argentine President Criticizes Wall Street Analyst Naysayers The following cable contains sensitive information. Not for internet distribution -------------- Summary -------------- ¶1. (SBU) President Cristina Fernandez de Kirchner (CFK) has taken on Argentine economic analysts abroad who have criticized the GoA's economic policy mix, calling them "parrots who always predict chaos and cataclysm...who are always talking about our country risk and never talking about the risks of Lehman Brothers or Merrill Lynch." She called on them to be more humble and think about their own country's interests. Many Wall Street market analysts who cover Argentina are Argentine nationals and their criticism of the GoA's economic policy mix has dogged CFK's administration since she took office December 2007. While the president's shadenfreude at the fall of Wall Street giants who warned of Argentina's own failings is understandable, post financial sector contacts call these Argentine analysts "patriots, not parrots," who are alerting citizens here to their government's economic mismanagement. End Summary. -------------- Criticizing Economist "Parrots" -------------- ¶2. (SBU) In the past months, GoA officials have hailed domestic economic stability in the face of international market turmoil, citing the GoA economic model and in particular its policy of dollar reserve accumulation as effectively insulating Argentina against exogenous shocks. These GoA arguments have quieted of late as international commodity prices have dropped, Argentine country risk premiums have steadily risen (to over 900 basis points as of Sept 18),and market analysts have continued to criticize Argentina's economic model as short-sighted and incapable of addressing high inflation and other developing macroeconomic disequilibria. ¶3. (SBU) Over the past two days, however, President Cristina Fernandez de Kirchner (CFK) has confronted those economic analysts -- and particularly Argentine economic analysts on Wall Street -- who have criticized Argentina's economic performance. On September 16, during a ceremony in Buenos Aires province capital La Plata, CFK railed against "international and national (financial analyst) 'parrots' who always predict chaos and cataclysm...who are always talking about our country risk and never talking about the risks of Lehman Brothers or Merrill Lynch...and today we see how they have fallen. We are here standing humbly and small before other large countries...we need to wise up not to be taken as fools...the First World that we have depicted as the Mecca to which we must arrive, has crumbled (sic) like a bubble." ¶4. (SBU) On September 17, CFK again contrasted the willingness of international analysts to criticize Argentine economic policy while failing to predict the unfolding crisis in their own developed financial markets. During a ceremony announcing the electrification of one of metropolitan Buenos Aires' commuter rail lines, she said "Today, they said that Lehman Brothers defaulted on $371 billion, double the amount Argentina defaulted on. I hear economic experts, national and international 'parrots' repeating formulas, criticizing...but these developments (in international financial markets) oblige us to exercise more humility as we evaluate and diagnose." CFK then directed comments at Argentine Wall Street analysts at major brokerage houses, who have been criticizing GoA economic management in their daily reports and in international press. "I ask them to think about their own country's interests. Regarding the (Argentine) government officials who they continue to criticize, that's what they are there for, but one should care (more) for one's country." -------------- Comment: CFK's Shadenfreude Moment -------------- ¶5. (SBU) CFK's intemperate remarks may reflect her ire about the ongoing "suitcase" trail in Miami, on which mercifully she has not commented this month. There is clearly an element of score-settling as well. International market analyst criticism of CFK's economic policy mix has dogged her administration since she took office December 2007, and her shadenfreude at the fall of Wall Street giants who had warned of Argentina's own shortcomings is understandable. Argentine analysts at major New York investment houses -- including Goldman Sachs' Pablo Morra, Lehman Brothers' Guillermo Mondino (ex-Secretary of Finance under Economy Minister Cavallo),JP Morgan's Vladimir Werning, Merrill Lynch's Pablo Goldberg, HSBC's Javier Finkman, Citibank's Alberto Ades, Barclays Eduardo Levy-Yeyati, and UBS's Javier Kulesz -- have indeed been increasingly critical of GoA economic policies, policies they see as improvised and failing to address macro-economic challenges appropriately. Embassy financial sector contacts and pundits, in their turn, have criticized CFK's criticism of Argentine analysts abroad. They call Argentine Wall Street analysts "patriots, not parrots," alerting citizens here to their own government's economic mismanagement. KELLY