With the pattern of inflation, devaluation and recession …

The August 11 primary elections revealed the economic catastrophe that already existed. After a week of pathetic gears and counter-gears, the government has opted for a radical change in economic driving over the weekend. The arrival of Hernán Lacunza to the Treasury replacing Nicolás Dujovne has raised expectations about policy changes and more than one issue. Speeches by Minister Lacunza and the President of the Central Bank, Guido Sandleris, have given the following answer: nothing will change. There were no ads. On the contrary, the policies and policies applied up to now have been ratified, which was the main cause of the financial disaster first, socio-economic then, and finally political (as Alfredo Zaiat describes it in his column). Retirees, whose income has been further delayed after the inflationary shock caused by further macroeconomic devaluation, will not be relieved. Sandleris himself admitted that inflation in August and September will again be high, which is not new, but confirms that the government has given up to avoid the transfer to the domestic prices of the last dollar bond. In addition, the government (through the Ministry of Production and Labor) has launched an appeal to the Wages Council by August 30, which must define a new subsistence level, as promised last week, but with novelty that can not be put into effect. From September onwards. That is to say, it will be loaded in October. By government decision, the country will transit the remaining months until the transfer of command with inflation, prohibitive interest rates for production and mortals for those who are financed by cards or overdrafts; delay in the income of those who live off their labor in relation to the dollar and the baskets of consumption; and company closures and staff suspensions (as this continues to be verified daily). And a policy that governs a financial system is transformed into a timba from which emerge the only absolute winners of the model: the speculators.

"They did not vote for me to co-govern and I do not take decisions on behalf of Macri, because I am their alternative," said Alberto Fernández, presidential candidate of the Todos Front, at several media that had consulted yesterday, a few hours after the beginning of the presidential term. He will be summoned to bring a person close to him to elaborate the regulation with the new Hernán Lacunza (see separate note in this edition). Macri's request is likely responding to a request from the IMF. The government is waiting for the visit of the audit mission of the agency to approve the budget accounts and authorize the disbursement of $ 5,400 million in the early days of September. Macri knows that support from Alberto Fernández is worth more than a thousand gestures "on the market", which has already published his hand. His claim to the candidate who beat him within the OSP to share economic decisions was probably not related to an exchange of ideas with his during the fifth weekend in Los Abrojos, but it looks like he's leaving Washington. If the Fund wishes to obtain a commitment from Fernández, it will obviously have to talk directly with him, even if he disavows the current government.

The government's first priority is to maintain the IMF's disbursement commitment. To achieve this, it must show its ability to stabilize markets, even if it is not until a few weeks. But this capacity is uncertain today. Yesterday, under the pressure of a consortium of foreign banks, who claimed that the obligations they had been given as collateral for a loan of an amount of about ten billion dollars to National Treasury had been devalued by more than 40% last month. they demanded the government early cancellation of some $ 2,600 million of debt. The government had to access these funds and use them yesterday from its already sordid international reserves. The negotiating capacity of the authorities is very close to zero. Like its availability in dollars remaining.

The speeches of Lacunza and Sandleris, in the morning and a few minutes before the opening of the markets, had for sole recipient, precisely the markets. That is to say the weakness of the financial system that plays the role of transmission belt of the crisis. If there is a new shock of mistrust and a new race, all the scaffolding of the speculative model created by this government will fall like a house of cards. This is why desperate attempts to prevent anyone from moving the table or opening the window too much and leave the wind inside. How do you maintain this vulnerable balance? With interest rates that will remain well above 70% in pesos and dollar futures from the Central Bank, so that the funds do not continue to flee at the speed of the dollar, confirmed Sandleris. These are the same instruments that the government has been using since February 2016, with known results. He always insists.

In the financial market, they know that even if the government manages to maintain this situation for a while, other sectors are paying increasing costs for these policies. Among them, provincial governments and many medium and large private companies. That is to say, this set of public and private institutions that had access to international credit, borrowing in dollars, but obtaining their resources exclusively in pesos (because they were drawing from, or because they were producing for the market inside). With the extraordinary rise of the dollar on Monday, 12 and the decline in taxpayer and client revenues, the provinces and the dollar debtor companies have gone from being an emergency to an emergency. That "the dollar stabilizes at a very competitive level, between 58 and 60 pesos", as the government would like, is not good news for these debtor entities. Some people think that, after the last events, some have been sentenced to a fault not far removed. Not the national public sector, but provinces and companies.

They know it abroad and the reports of the rating agencies or investment agencies are becoming more and more difficult. Standard and Poor's yesterday lowered the bill to a public bank and two private banks: the province of Buenos Aires, Galicia and Patagonia. The S & P report suggests that financial institutions can not ignore the climate of turbulence and the consequences of the measures taken by the government. The public bank concerned is the largest institution of the province whose economy was managed, until last Friday, by which she became Minister of Finance of the Nation,

And for the real economy? Nothing new, much less good. Yesterday, the closure of another autopartist, based in the Great Rosary: ​​Link, was known. An SME of 30 employees, another victim of the destruction of the industrial fabric that fed, with a dynamic internal demand, the work of terminal factories, producers of inputs and spare parts for the manufacture of these inputs. Layoffs under cover (without renewal of contract) also took place in La Serenísima de Longchamps. Cars and milk, in two very different consumption layers, but with industries and workers having the same destination. The trap is the model, a labyrinth from which it is impossible to go out according to its own logic. And yesterday, the government has fully ratified it.