STOCK MARKET WATCH -- Friday, 18 May 2012

[Demeter]

73. In South America, Separating Fact From Fiction RE: ARGENTINA'S DEFAULT By Paul Krugman

http://truth-out.org/opinion/item/9152-in-south-america-separating-fact-from-fiction

The columnist Matt Yglesias, who just spent time in Argentina, recently wrote in Slate about the lessons of that country's recovery following its exit from the one-peso-one-dollar "convertibility law." As he says, it's a remarkable success story, and one that arguably holds lessons for the euro zone.

"Default and devaluation were hardly a party. They destroyed the country's banking system and wiped out many Argentines' savings," Mr. Yglesias wrote on May 1. "But it did work. Argentina has grown rapidly in subsequent years and its unemployment rate has fallen steadily to 6.7 percent, a rate we envy in the United States."

I'd just add something else: press coverage of Argentina is another one of those examples of how conventional wisdom can apparently make it impossible to get basic facts right. We keep getting stories about Ireland's recovery when there is, in fact, no recovery — but there should be, darn it, because they've done the "right" thing, so that's what we'll report....And conversely, articles about Argentina are almost always very negative in tone — they're irresponsible, they're renationalizing some industries, they talk populist, so things must be going very badly. Never mind the data, shown on this page.