Unhedged – "Will the US Bail Out Argentina?"

Podcast: Unhedged (Financial Times & Pushkin Industries)
Date: October 23, 2025
Hosts: Katie Martin (in London), Robert Armstrong (in New York)
Guest: Michael Stott (FT’s Latin America editor, in Brazil)

Episode Overview

This episode dissects the US Treasury-led effort to prop up Argentina’s spiraling economy and currency under the dramatic presidency of Javier Milei. With the peso collapsing, Milei’s populist agenda under threat, and US politics in play, the Financial Times’ Katie Martin and Robert Armstrong are joined by Latin America expert Michael Stott. They explore why and how the US is intervening, whether another Argentinian crisis can be staved off, and what’s at stake in both Buenos Aires and Washington.

Key Discussion Points & Insights

Who Is Javier Milei? (02:00–03:00)

• Milei’s Persona:
  • Self-styled "anarcho-capitalist" and "dog whisperer," with a penchant for English mastiffs and chainsaws.
  • His chief of staff, Karina, is his sister and a former cake seller.
  • Founded his own political party to radically shrink the state.
• Soundbite:
  • "He's a self styled anarcho capitalist, Katie. He is very fond of his pet dogs, his English mastiffs, to whom he speaks regularly for guidance…" —Michael Stott (02:21)

Early Successes — and Unraveling (03:00–05:00)

• Platform & Initial Impact:
  • Milei slashed public spending, moved the budget to surplus, and ended money-printing to fight inflation.
  • Achieved results quickly via executive orders:
    • "One of the most drastic fiscal adjustments ever achieved anywhere." —Michael Stott (03:18)
• The Downturn:
  • The strong peso helped tame inflation but battered growth, depleted reserves, and made dollar debts harder to repay.
  • An unexpected regional election loss (Buenos Aires Province) raised doubts about Milei's political future and spooked markets, exposing vulnerabilities before upcoming congressional midterms.

The Curse (or Culture) of Extreme Populism (05:46–07:14)

• Argentina’s Political Pendulum:
  • Long history of swinging between Peronist (populist left) and neoliberal (populist right) regimes.
  • Peronism:
    • "A nationalist populist movement… it's almost a way of life for many Argentines." —Michael Stott (06:08)
    • Cristina Fernández de Kirchner (current Peronist leader) is under house arrest amid corruption charges.
  • Reference to Carlos Menem's flawed dollar peg policy in the 1990s as a cautionary tale.

If Peronists Return: Financial Risks (07:14–08:16)

• Stott’s Warning:
  • A Peronist comeback likely means a return to profligate spending, debt, and money-printing.
  • "There's no real sign that the Peronists have learned their lesson…" —Michael Stott (07:36)

The Peso Crisis and Turning to the US (08:16–10:29)

• Milei’s government ran out of reserves defending the peso, so he sought US help.
• Milei’s alliance with Trump is recent and somewhat awkward—Milei favors free trade, while Trump is protectionist, but both bond over culture wars.
• Key Quote:
  • "So he turns to his American friends and says, please help. And surprisingly, Scott Besant comes to the rescue." —Michael Stott (09:33)

The Role of US Treasury Secretary Scott Besant (10:29–12:54)

• Background:
  • Besant is a macro/currency trader, formerly at George Soros’s hedge fund (famously shorted the pound).
  • Now, he’s backing the peso, a reversal of his old playbook.
• Skepticism at Home:
  • Some in the US question why money is going to Argentina, referencing past bailouts like the successful Clinton-era Mexico intervention.
  • "The A in MAGA, one of those A's is not for Argentina." —Robert Armstrong (11:20)
• Farmers' Dilemma:
  • US farmers, a key political constituency, see Argentina as an agricultural rival—Trump’s bailout faces domestic pushback.

Lack of Clarity and the Mechanisms of the Bailout (12:54–15:38)

• Opaque Bailout Details:
  • $400 million in direct peso purchases by the US Treasury; rumors of a $20bn fund and a currency swap, but with little transparency and no real confirmation.
  • "There’s been an extraordinary lack of transparency around the whole idea of this US Bailout." —Michael Stott (12:54)
• Private Sector Reluctance:
  • US banks, skeptical and risk-averse, reportedly demand government guarantees before joining.

Market’s Perspective and Hedge Fund Activity (14:48–15:38)

• Hedge funds (e.g., Discovery Capital) made huge returns speculating on Argentine debt post-Milei’s election, buying at deep discounts and selling at threefold gains.
• Despite US involvement, actual sums risked so far are modest—potential for the US Treasury to walk away with minor losses.

Will Milei Survive? (15:38–18:21)

• Ultimate Determinant: The Midterms:

  • Stott: "It depends first and foremost… on the Argentine voters." (15:52)
  • If Peronists win, Trump has signaled he’ll withdraw support ("if Milei loses, I'm out"), making US help contingent on election results—unusually explicit for such interventions.
  • Peronist leader Kirchner sought to use Trump's threat as political ammunition:
    • "Christina Kirchner, the Peronist leader, seized on this very quickly and posted very fast Trump's remarks saying, underneath Argentines, you know what to do now." —Michael Stott (17:10)
  • Cabinet turmoil: Foreign and justice ministers quit; impending reshuffle adds to uncertainty.

• Stott’s Ballpark Prediction:

  • "The smoke signals don't look very good. ... If the Peronists do triumph, and there's a definite possibility of that, I think it's game over for Milei." (17:43)

Notable Quotes & Memorable Moments

• "They're (Argentina) a nationalist populist movement… it's almost a way of life for many Argentines. Peronism. It's almost like a huge political tribe." —Michael Stott (06:08)
• "The A in MAGA, one of those A's is not for Argentina." —Robert Armstrong (11:20)
• "There’s been an extraordinary lack of transparency around the whole idea of this US Bailout." —Michael Stott (12:54)
• "It depends first and foremost… on the Argentine voters." —Michael Stott (15:52)
• "If the Peronists do triumph, and there's a definite possibility of that, I think it's game over for Milei." —Michael Stott (17:43)

Key Timestamps

• [02:21] – Introduction to Javier Milei’s persona and style
• [03:18] – Explanation of Milei’s economic reforms and initial success
• [05:13] – The impact of regional election losses and the rising threat of the Peronists
• [06:08] – Overview of Peronism’s deep roots and fickle legacy
• [08:27] – How Milei turned to the United States for currency support
• [10:29] – Profile of Scott Besant and the controversial US response
• [12:54] – Lack of clarity/transparency in the US bailout plan
• [14:48] – Hedge funds’ big Argentine trades and risk assessment
• [15:52] – Stott on the decisive importance of the upcoming election
• [17:10] – Trump’s explicit intervention in Argentina’s internal politics

Tone & Style

The conversation mixes Financial Times precision with informal, witty banter. Katie Martin and Robert Armstrong maintain a sardonic, sometimes irreverent tone, especially in their asides about populist politics ("dog whisperer," "chainsaw-wielding"), generational rivalries, and culture clashes (mocking Peronist/neoliberal swings and American farmers' complaints).

Closing: Predictions and Uncertainty

The episode wraps with a sense of foreboding and open questions:

• Will Milei survive politically and economically?
• Will the US deepen its bailout, or will domestic political costs force a pullback?
• How will Argentina’s 2025 midterms reshape the region’s politics and economic future?

"It was a high, high drama. It sounds like we will come back to this probably next week." —Katie Martin (18:21)

For Listeners in a Hurry

• Argentina’s economic crisis is spiraling; the US Treasury is intervening via currency support.
• President Milei’s radical reforms briefly stabilized Argentina, but political setbacks and dwindling dollar reserves put his tenure at risk ahead of midterm elections.
• America’s bailout is politically fraught, unusually explicit in picking sides—a reversal from typical diplomatic neutrality.
• The outcome hinges on Argentina’s volatile electorate and US appetite for risk.

(Adverts and production credits omitted. “Long/Short” banter and cultural recommendations—Palestrina, bubbles—begin after [19:08], signaling the episode’s end.)