While we are sure it is a very sad coincidence, on the day when Argentina decrees limits on the FX positions banks can hold and the Argentine Central Bank's reserves accounting is questioned publically, a massive fire - killing 9 people - has destroyed a warehouse archiving banking system documents. As The Washington Post reports [3], the fire at the Iron Mountain warehouse (which purportedly had multiple protections against fire, including advanced systems that can detect and quench flames without damaging important documents) took hours to control and the sprawling building appeared to be ruined. The cause of the fire wasn’t immediately clear - though we suggest smelling Fernandez' hands...
[4]
We noted yesterday that there are major questions over Argentina's reserve honesty [5]...
While first print is preliminary and subject to revision, the size of recent discrepancies have no precedent. This suggest that the government may be attempting to manage expectations by temporarily fudging the "estimate " of reserve numbers (first print) while not compromising "actual" final reported numbers. If this is so, it is a dangerous game to play and one likely to back-fire.
During a balance of payments crisis - as Argentina is undergoing - such manipulation of official statistics (and one so critical for market sentiment) is detrimental to the needed confidence building around the transition in the FX regime.
And today the government decrees limits on FX holdings for the banks [6]...
Argentina’s central bank published resolution late yday on website limiting fx position for banks to 30% of assets.
Banks will have to limit fx futures contracts to 10% of assets: resolution
Banks must comply with resolution by April 30
And then this happens...
Via WaPo, [3]
Nine first-responders were killed, seven others injured and two were missing as they battled a fire of unknown origin that destroyed an archive of bank documents in Argentina’s capital on Wednesday.
The fire at the Iron Mountain warehouse took hours to control...
The destroyed archives included documents stored for Argentina’s banking industry, said Buenos Aires security minister Guillermo Montenegro.
The cause of the fire wasn’t immediately clear.
Boston-based Iron Mountain manages, stores and protects information for more than 156,000 companies and organizations in 36 countries. Its Argentina subsidiary advertises that its facilities have multiple protections against fire, including advanced systems that can detect and quench flames without damaging important documents.
...
“There are cameras in the area, and these videos will be added to the judicial investigation, to clear up the motive of the fire and collapse,” Montenegro told the Diarios y Noticias agency.