The Market's Changeable Mind

Just five days ago, Cristina was the bogeyman who was going to destroy the Argentine economy. Today, she soothes the savage beast of Wall Street.

From Bloomberg News today:

Argentine Peso Bonds Gain on Expectations Data Concerns to Ease
By Lester Pimentel

"The bonds are responding to the passing of elections and the positive tone in global markets,'' said Mariano Arrieta, an analyst at Puente Hnos Sociedad de Bolsa SA in Buenos Aires. "People expect that in the future, the consumer price index will begin to normalize.''

And last Friday:

Argentine Debt Devastated by Data Suspicion, Election
By Lester Pimentel

The widespread suspicion that the government of President Nestor Kirchner has manipulated inflation data and the likelihood that his wife Cristina Fernandez de Kirchner will succeed him are transforming the Argentine bond market into a financial bloodbath.

Update: A financial writer friend of mine sent the following note and chart. While I do still hold that the market is neurotic and intrinsically contradictory (thus making rationalizing it journalistically on a day-to-day basis almost impossible, at least to do well), the writer does have a point about the apples-to-oranges issue.

I think it's a little misleading to put those two stories together on your blog. The one last week was a big picture look at argy bonds over the past year while the one today is a daily snapshot we do to just show what's going on the market at any given moment. But they aren't really comparable. I'm attaching a chart of the main inflation-linked peso bond's performance this year. It's a chart of prices, not yields, but still gives a pretty good picture of what's going on this year. The little tiny rise at the end is what happened in the daily story. But the starting point on the far left shows how far prices have fallen since Nestor starting fudging the numbers.

What I'm really glad about is that I don't have to write these damn stories anymore. They were the bane of my existence for a while.