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