Prat-Gay fired as Argentine Finance Minister after one year

[tenorly]

Last edited Mon Dec 26, 2016, 06:19 PM - Edit history (1)

Argentine Finance Minister Alfonso Prat-Gay was fired on Monday after just one year in the post as a long-heralded recovery in the economy fails to materialize.

The ministry he headed will now be split into two, with close Macri family associate Luis Caputo, who was finance secretary, heading the new Finance Ministry and Nicolás Dujovne, a co-founder of President Mauricio Macri's right-wing think tank Pensar, overseeing the Economy Ministry.

President Macri requested Prat-Gay’s resignation following disagreements over economic policy, Cabinet Chief Marcos Peña said. The economy has sunk into recession this year, defying Macri’s forecast that it would return to growth in the second half. The inflation rate has likewise defied Macri's projections of "20 to 25%," rising from 24% in November 2015 to 45% currently.

"Economic policies were very erratic, with bad results," said Eduardo Hecker, a former securities regulator who now heads consultancy DEL. “By firing Prat-Gay, Macri has found the perfect scapegoat for this situation.”

Gross domestic product fell 3.8% in the third quarter from a year earlier, the statistics agency reported on Dec. 22 as rising prices eroded people’s purchasing power; it had grown by 2.5% in 2015, the year before Macri took office.

At: https://www.bloomberg.com/news/articles/2016-12-26/prat-gay-resigns-as-argentine-finance-minister-after-one-year

[Judi Lynn]

1. Out with the bad, in with the equally bad.

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Alfonso Prat-Gay



Luis Caputo



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What a clown show!

Did anyone think Macri would do this to Prat-Gay? It must be just like the Biblical story of Jonas, when the ship's crew elected to throw him overboard when the going got tough.

Of course Macri won't give up his original goals, just like Trump's. Just wants to calm things down until everyone shuts the heck up for the moment, wouldn't you think?

[tenorly]

2. Well put. Macri isn't rearranging deck chairs as much as he's circling his wagons.

The Caputos have been close personal friends of the Macris since the dictatorship, when both families benefited from choice construction contracts and insider info ahead of the 1981 mega-devaluation. Both families have godfathered a number of each others' children (which makes you very close indeed if you're Italian).

Fast-forwarding to 2016, some of Luis Caputo's greatest hits since Macri took office include arranging the dollar futures heist a year ago that cost the Central Bank $4 billion when Macri devalued the peso by 40% in a day. This pushed the economy into its current recession but made the well-connected (including the Caputos) an instant profit of 20% or more.

Try asking your stockbroker for that!

More recently, the Caputos cost the Social Security Fund around $40 million on November 11 by massively diluting stock in their industrial firm Mirgor. Obtaining regulatory approval for this move was a cinch given that the CNV (Argentina's SEC) responds to the Secretary of Finance.

And - you guessed it - that would be Luis Caputo.