Not So Hot on Cordero

I read some comments like this from the local press, but the Bloomberg write-up of the reaction to Cordero's replacing Carstens is rather harsh:

“Over the medium term, we acknowledge that Cordero’s nomination may bode ill for the passage of reforms, as Carstens’ ability to build consensus behind the scenes will be hard to match,” Barclays said in a report yesterday.

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“Agustin was very good at negotiating with Congress,” Federico Kaune, who helps manage $8.5 billion in emerging market assets at Morgan Stanley in New York, said today in an interview. “I don’t know whether Cordero has that ability or not.”

The peso fell as much as 0.8 percent after Calderon announced his decision to replace Carstens. The currency declined 0.6 percent to 12.9704 per dollar at 10:34 a.m. New York time today.

“We believe Cordero is not the best man for the finance minister post: He is a PAN loyalist and will be a less effective negotiator with Congress,” Nick Chamie, head of emerging-market research at RBC Capital Markets, said yesterday.

The yield on Mexico’s benchmark bond rose 1 basis point, or 0.01 percentage point, to 8.14 percent. The price of the 10 percent security due in December 2024 fell 0.13 centavo to 116.04 centavos per peso, according to Banco Santander SA.

“Markets would prefer Carstens stay as finance minister, as the next year will be very challenging in terms of budgetary and overall economic policy,” said Win Thin, senior currency strategist at Brown Brothers Harriman & Co. in New York. “Such a move is not a good one for the peso.”

I wonder if the lack of confidence stems from Cordero being an empty slate, or if he has a specifically bad reputation for partisanship, or lack of political acumen, or prudence, or what have you. Also, I've read that the PRI had a lot of confidence in Carstens and he was Calderón's ideal interlocutor on all things fiscal, but people shouldn't go overboard in praising his consensus-building. That's certainly an admirable trait, but only insofar as it leads to good legislation with a broad base of support. The fiscal plan passed in 2007, for instance, was not sufficient, which is to say, the consensus that Carstens built was wrongheaded.