It is sad to watch once thriving economies commit economic suicide. Two examples are Venezuela and Argentina. But Christine Lagarde thinks the most recent $56 bn bailout of Argentina is “bearing fruit.’
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But here is the problem. At the two-year tenor, Venezuela leads in the (economic) demolition derby against Argentina with Venezuela checking in at 231% versus Argentina at “only” 42%. In terms of daily changes in yield, Argentina wins with +644 basis points, Venezuela is in 2nd place with +170 basis points and Mexico is in third place with +158 basis points.
Venezuela and Argentina are competing on which nation has the most downward sloping yield curve. Argentina (blue) wins, but Venezuela is a close second. Mexico (green) is also steeply downward sloping, but it is on a different axis altogether.
This is bearing fruit?
No one is talking about Argentina’s Eva and Juan Peron anymore. Probably because the USA has their own version in Hillary and Bill Clinton.