The Wednesday Letter #195

THIS WEEK: Argentina Turns the Page; Milei and Brazil; Recession Fears; Nikki Haley’s Social Media; NVIDIA and Tech Stocks.

ARGENTINA TURNS THE PAGE

Now begins the hard part. Can Javier Milei put Argentina on the path to recovery? The market expressed some confidence with the Merval stock index jumping 23% after the results. Needless to say, it will not be easy. From a political perspective, he will face significant opposition from the same individuals and institutions that he has pummeled mercilessly for months as parasitic and corrupt. From an economic perspective, dollarization will not be sufficient on its own. Sergi Lanau of Oxford Economics says that "Milei's party controls 38 out of 257 seats in congress [and only 7 seats in the senate]. The rest are people who couldn't fix Argentina for decades. He won't be able to dollarize; he won't do major fiscal adjustment."

Milei's election speaks volumes about the desperation felt by the average citizen, beaten down for decades by macroeconomic mismanagement and one governance debacle after another. Of course, there have been worse economies on Earth, but prob…