Twobreakfasts sez Mecha isn't going

So after Reuters told the world that Mercedes Araoz was leaving as FinMin Thursday (with Reuters being tipped by at least three high-ranking gov't souces, appraently), President Twobreakfasts comes out and says that's not true...but then again if you look at exactly what he said, there was room left for manoeuver.

All very strange, so the best solution until the true truth emerges is.......MORE MUSIC!

Peru: Bye Bye Spongebob, Hello (Mecha) Meche

Note: in my haste earlier I wrote "Mecha" Araoz instead of her real handle, 'Meche'. Errare humanum est.

According to breaking reports, Mercedes Araoz (one of the few good politicos hanging round Twobreakfasts these days) has just been named as Peru's new FinMin, replacing Luis Spongebob Carranza.

Spongebob will be remembered as Mr 6%....no, 5%...no, make that 4%....errr 3%, hold on 2%....aha 1% GDP growthman and architect of the worst hard landing economic slowdown in Peru's modern history. He'll now go back to his cushy and well paid bank job (though they never really stopped his bank salary I hear......but we can't mention that) after taking time off and hanging at the exclusive 'Asia' beach resort South of Lima for a month.

Meanwhile, Mercedes 'Meche' Araoz gets to play at numbers after working up through the ministerial system. A workaholic, a nice person and as it's not a sin let's point out that she's pretty, too.

Look into my eyes, Peru.......

A truly frightening display of idiocy was on show for viewers of Peru's TV program "El Cuarto Poder" last night. Finance Minister Luis Carranza was interviewed on show and managed to pack in haughty arrogance, arch stupidity and a full-on attempt at mass-hypnosis in the space of just ten minutes. Here's an Ottotrans™ of some direct quotes:

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

"The most important is that they (the Peruvian people) are relaxed and continue making their consumption, savings and investment decision with a long-term view and not on account of bad news that might appear one day in a newspaper or from a pessimistic analyst.

He then went on to ask people not to be carried away by negativity because the government has the clear objectives to maintain growth and reduce poverty. And then...

"The important thing is to be relaxed and be safe in the knowledge that in the government we are doing everything we can and we have the strength to maintain GDP and employment growth according to our needs."

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

Repeat after me:

"The Government Will Look After You."
"I'm From The Government And I'm Here To Help You."
"Every Day In Every Way I'm Getting Better And Better."
"Fitter, Stronger, More Productive."

So as you can imagine, Otto is sure his words went down well with the 10,000 Peruvian miners laid off in the first two months of 2009. Certain that the 45% drop in real estate sales registered in Lima in the final three months of 2008 will immediately bounce back thanks to Carranza's soothing words. And how can there be any doubt that the ZERO PERCENT CURRENT GROWTH registered by local experts (when they don't swallow the gov'ts massaged numbers whole) will immediately pick up again thanks to Luis's performance last night?

To round off his pep-talk last night, Carranza reminded the world yet again that the IMF had predicted 5% growth for Peru in 2009. Hey wow..the IMF...they're serious people and never get it wrong in South America. Or perhaps not.

Musical chairs, twobreakfasts style

As his President enters the room, Luis Valdivieso
shields his eyes from the glare of his smile

Remember about a month ago when Peru's FinMin Luis Miguel Valdiveso suddenly and unexpectedly resigned? Remember how his predecessor Luis "luckiest economist in LatAm" Carranza stepped up to take his place? Remember how, in the hasty and brief press conference Valdivieso said he'd been offered an alternative job by President Twobreakfasts?

Well yesterday the episode cleared itself up and Valdivieso was named as Peru's new ambassador of the United States of America, no less. It's all pretty logical on the superficial level, of course. Luismi was an IMF flunkey for years and knows the protocol side of the US backwards. He's also replacing the current Peruvian ambassador, Felipe Ortiz de Zevallos, who strangely and coincidentally handed in his resignation on January 21st, the day after Valdivieso resigned.

But it does shed a little light on the way Twobreakfasts is thinking (if the term is apt) on the Peruvian economy. He clearly wanted Carranza back, as the guy has a higher profile than Valdivieso and is (due to his incredibly lucky timing) credited as being a good hands-on economy manager. In fact he just continued the autopilot that came from the real architect of the Peruvian economy reforms, PPK, and did nothing much....the 'ain't broke don't fix it' rule. But style is far more important than substance in The World According To Twobreakfasts and Carranza's arrival has been an APRA spindoctors dream.

But once again, IKN wonders why Carranza came back and how Twobreakfasts got him to agree. When Carranza first resigned his post, the reason was that he wasn't making enough money as FinMin and wanted to get a nice cushy, highly paid gig in some private consultancy. Yeah, truly, it was said out loud right here by then PM Del Castillo and reported by your diligent IKN. It's kind of intriguing to think about all the recent corruption scandals in this awful Peruvian APRA government and then think that Carranza suddenly finds the FinMin job attractive once again, is it not?

Peru's Finance Minister admits he can't do the job and quits, giving the job back to another quitter

Goodbye overrated lardass, hello overrated lardass.
Valdivieso (left) quits and Carranza (right) is back

So farewell Luis Miguel Valdivieso, best remembered as the fat guy who took over from the other fat guy as Peru's FinMin and talked nonsense about Peru's economy for six months or so. I still have fond memories of his Bistromatics attack on August 21st last year when he claimed Peru's inflation rate (then at 5.7%) would finish the year at 5.8%. The final score was 7.24%, which isn't bad for an ex-IMF lackey who'd never faced reality before but an eight-year old with the inflation chart and a straight-edged ruler could have done better. Word is that Valdivieso is quitting due to illness; he's sick to death of taking orders from his rat-faced new boss Yehude Simon.

The great news is that the fat guy he replaced is coming back to replace him. Luis Carranza, the luckiest economist on the planet who inherited a booming economy, ran it on autopilot for two years and then picked the right time almost to the month to quit and run away is taking the FinMin job back again. Otto finds this very strange, as Carranza's ostensible reason for quitting at the time was that his own funds were low and they just didn't pay him enough at the Ministry. Therefore his reappearance seems to suggest one of three things:

1) He couldn't find a cushy job in the private sector and he couldn't get enough of those paid evening speaker jobs to make ends meet. This is likely because it isn't just Otto who recognizes his mediocrity.

2) Like the rest of us he's noticed the rampant corruption and slush money swirling in and around the Twobreakfasts administration and wants his piece of the action. Wadya expect from the APRA boyz anyway? Justice?

3) He was talking total bollocks. Also highly likely, as he made a specialty of it in his first term of office.

Combinations of the above are acceptable, of course. So now that Peru is in the doo-doo and still won't admit it, we're about to see just how good Carranza really is. Otto has a friend who has constantly stuck up for Carranza and his record over the years. To that person I say "Betcha ten bucks yer man makes a hash of it all and shows just how mediocre he's always been". One thing Carranza was famous for during his last tenure was totally ignoring and despising his counterpart at the Central Bank, Velarde. Let's see if they get all touchy-feely this time around because it's going to be tough to run an anti-crisis plan if Carranza starts his primadonna antics again.

More luck than judgment

When you listen carefully to what LatAm politicos say, sometimes you notice how they inadvertently tell the truth. Today's example is Luis Valdivieso, FinMin of Peru and overpromted IMF-trained mediocrity. This is the same dude that took over the job earlier in the year promising inflation as under control, would be 5.5% at the end of the year (bigtime miss, Luismi) and that Peru would grow 9% in 2009 (errrr...revised down recently, dumbass?).

But the lapse into truth came at yesterday's presser when Valdivieso said (courtesy of OttoTrans™);

"...We are very lucky because the price of imported food is dropping..."

Y'see, these people can plan is prognosticate and pontificate until the cows come home, because the actual effect they have on their economies is between slight and none at all. Peru didn't suddenly grow in the last five years because of a newly found sanity in fiscal management; it grew because the world market decided it would pay more for copper, gold, silver and all their friends. Period.

And the locals kept on telling their citizens how they'd control inflation, but it's taken the onset of a global recession (no less) to curb the price rises felt by Peruvians (most of whom haven't seen a penny of the much vaunted GDP growth hit their own pockets). And note the spin; the world grows, and that's good for Peru. The world stops growing.... yessiree, that's good for Peru, too! Jam tomorrow, anyone?

It's all total BS...pure smoke'n'mirrors from all of them, not just Peru. Once they get past the basics of "build up reserves, tax the hell out of the little guy and leave the rich guys alone" they are then in the lap of the global gods when it comes to the long term health of their nations. It matters not the hue of governmental politics, either. If commods prices stay low, the following South American countries are in the caca:

All of them.