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Photo: Mario De Fina/NurPhoto via Getty Images

Argentine President Mauricio Macri came to office as a pragmatic businessman who was going to save Argentina's government and economy from socialism. As this year's presidential election approaches, socialism isn't looking so bad.

What's next? Investors are beginning to fear the worst — that Macri will lose this year's election to former President Cristina Fernandez de Kircher, who defaulted on the country's sovereign debt in 2014, which was issued as partial compensation for the previous default in 2001.

  • "I truly believe that if Cristina wins, we're looking at defaults," said an investor who was not authorized to speak publicly about the issue. "Given the state of the economy, her election would just crash the market."

Where it stands: The central bank has raised interest as high as 65% to cut down inflation, but has only choked off the country's growth, pushing it into recession. The central bank is now fixing the exchange-rate band, or instituting currency controls, while the government freezes prices on 60 food products until October.

  • Argentina’s consumer price data showed that inflation rose last month to 54.7% year-over-year, the highest level on record. Consumer prices rose 55%.
  • Poverty in the country rose to 32% at the end of 2018, up from 25% the prior year.
  • Unemployment rose to 9.1% and the country's GDP fell 6.2% from a year ago.
  • The dollar recently traded at 44 pesos, almost triple the rate when Macri took over as president and its weakest rate ever.

Catch up quick: Argentina was an investor darling when Macri came to office in 2015, reaching a settlement with the creditors and levering the country up with new debt, including a 100-year bond investors said was issued largely out of hubris.

  • Argentina's government expects to pay a total of $13.3 billion in bonds maturing in 2019, according to Reuters, including $5.9 billion in dollar-denominated bonds, which get more expensive as its currency depreciates.
  • A $56 billion loan from the IMF is helping pay off the current obligations, but that too will need to be paid back.

The bottom line: Fortune's Kenneth Rapoza writes that things are starting to look "terrible" for Macri.

  • "The 'Macrisis' will bring volatility, opportunities for the speculators and suffering for the real people," Fernando Pertini, chief investment officer for wealth management firm Millenia Costa Rica told Fortune. "I doubt this suffering population will keep voting for him."
  • A recent poll by polling firm Synopsis has Macri losing in all 3 likely election scenarios with the expected alternative candidates and at least 7 points behind.

Go deeper: The relative safety of sovereign debt

Go deeper

Biden taps Brian Deese to lead National Economic Council

Brian Deese (L) in 2015 with special envoy for climate change Todd Stern (C) and Secretary of State John Kerry (R). Photo: Mandel Ngan/AFP via Getty Images

President-elect Joe Biden announced Thursday that he has selected Brian Deese, a former Obama climate aide and head of sustainable investing at BlackRock, to serve as director of the National Economic Council.

Why it matters: The influential position does not require Senate confirmation, but Deese's time working for BlackRock, the world's largest asset manager and an investor in fossil fuels, has made him a target of criticism from progressives.

Felix Salmon, author of Capital
28 mins ago - Economy & Business

The places regulation does not reach

Illustration: Aïda Amer/Axios

Financial regulation is not exactly simple anywhere in the world. But one country stands out for the sheer amount of complexity and confusion in its regulatory regime — the U.S.

Why it matters: Important companies fall through the cracks, largely unregulated, while others contend with a vast array of regulatory bodies, none of which are remotely predictable.

1 hour ago - Economy & Business

Boeing gets huge 737 Max order from Ryanair, boosting hope for quick rebound

Ryanair low cost airline Boeing 737-800 aircraft as seen over the runway. Photo by Nik Oiko/SOPA Images/LightRocket via Getty Images

Dublin-based Ryanair said it would add 75 more planes to an existing order for Boeing's 737 Max airplanes, a giant vote of confidence as Boeing seeks to revive sales of its best-selling plane after a 20-month safety ban following two fatal crashes.

The big picture: Ryanair's big order, on the heels of breakthrough vaccine news, is also a promising sign that the devastated airline industry might recover from the global pandemic sooner than expected.