Businessweek Daily

Argentina’s government took steps to support the peso for the fifth straight session yesterday, as Economy Minister Luis Caputo was in Washington to meet with his US counterpart. From the Bloomberg News Buenos Aires bureau, Patrick Gillespie and Manuela Tobias are here to explain how we got here. Plus: A mall mogul takes another look at politics after the Los Angeles wildfires, and Din Tai Fung hopes to expand its cult following in the US.

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Treasury Secretary Scott Bessent is trying to get Javier Milei out of a bind. The rub is Argentina’s president isn’t exactly in need of money from Washington, but instead lacks political muscle in Buenos Aires and beyond.

The Trump administration is negotiating a $20 billion financial lifeline with Argentina to, in Bessent’s words, “bridge” Milei to the nation’s midterm elections on Oct. 26. Such a deal would be a reward for Donald Trump’s top ally in Latin America, for his relentless loyalty and praise for the US president, who will host Milei on Oct. 14 at the White House.

How did Milei get in this rut? For more than a year after his election, Argentina’s self-described anarcho-capitalist president kept his approval ratings high as his government went on an unprecedented austerity campaign to fix a chronic fiscal deficit. They slashed spending and cut more than 50,000 governments jobs. To celebrate, he went on stage in February with Elon Musk—who was then working to chop the US federal workforce—and wielded his symbolic chain saw. (Musk says he regrets waving the saw himself.)

Musk and Milei at the Conservative Political Action Conference in February. Photographer: Jason C. Andrew/Bloomberg

Theatrics aside, Milei, who inherited a full-blown economic crisis in 2023, posted results early on. Inflation, once rising at a rate near 300% annually, is now about 34%. Poverty is also at its lowest level in several years. Milei’s party cruised to victory in June in city hall elections in the nation’s capital, driving hype that he was on course for a big win in October.

Then, in August, the plot thickened. Milei’s sister and top adviser, Karina Milei, got embroiled in bribery allegations she has denied. The economy is sputtering again as the president hiked interest rates to keep inflation low at the cost of grinding business to a halt. Milei also ignored would-be political allies in a go-it-alone campaign strategy that oozed overconfidence despite his party’s skeletal structure of staffers to get out the vote.

On Sept. 7, Milei’s party was wiped out in the local election for the province of Buenos Aires—separate from the city—by the leftist Peronist rivals that investors fear. Argentina’s bonds and currency started to nosedive as markets sensed that Milei is now in a very tight midterm race and that his path to reelection in 2027 looks more challenging. Perhaps most concerning: Apathy reigned as only 61% of voters showed up in the province, one of the lowest levels of ballots cast in decades.

Bessent came to the rescue on Sept. 22. He pledged a whatever-it-takes approach for Argentina because it’s a “systemically important US ally in Latin America.” Two days later, he announced negotiations were underway for the $20 billion lifeline, among a suite of other options.

Markets rose for a few days, only to sour again as no real details or timeline emerged about when Milei would get rescued. His team, having already burned through an estimated $1.3 billion in the last week to keep the peso afloat, arrived in Washington over the weekend to continue talks.

Bessent has made it clear he’s looking beyond Milei in the region. Several nations—including Brazil, Bolivia, Chile and Colombia—have presidential elections on the horizon. Bessent said on CNBC that he sees Argentina as a free-market “beacon” that, if successful, could be a blueprint to spark a wave of pro-US governments elsewhere in the region that’s governed mostly by the left right now.

It’s unclear whether any of this will actually materialize. When Trump met Milei in September on the sidelines of the United Nations General Assembly, he said, “I don’t think they need a bailout.” Republicans in farm states are angry about the idea of aiding Argentina, whose farmers have stepped in to supply China with soybeans amid trade tensions. Democrats are prodding Trump about how this aligns with the “America First” agenda.

The optics also aren’t great for Milei, who hasn’t brought the chain saw back to campaign rallies. He’d be a libertarian receiving a bailout from US taxpayers after repeatedly boasting that “the state isn’t the solution, it’s the problem.” A key actor in all this is the International Monetary Fund, which already gave Milei’s government most of a $20 billion loan in April, bringing Argentina’s total debts to the organization to $55 billion. Bessent and the IMF are coordinating aid for Argentina, and a simpler path could be the US helping Argentina reduce its debt load there.

As the IMF knows all too well, throwing money into Argentina doesn’t fix things. Milei’s root problem is his dwindling political support to win votes from Argentines who say the chain saw cut too deep.

In Brief

The White House is considering not paying federal employees for days they have been furloughed during the shutdown, a move that could run afoul of a law that mandates back pay.
The Carlyle Group is stepping into the economic data void left by the shutdown, estimating that in September just 17,000 jobs were created, among the weakest results since the US economy emerged from the 2020 recession.
The pass rate for the first level of the chartered financial analyst exam fell to 43% for humans even as artificial-intelligence models have advanced to the point that they can ace the final and hardest level of the exam in minutes.

A Billionaire Mall Developer Eyes Politics Again

Rick Caruso outside a building destroyed by fire, across the street from his Palisades Village mall in Los Angeles. Photographer: Philip Cheung for Bloomberg Businessweek

In early January, a wildfire started smoldering in a tinder-dry part of Southern California where it hadn’t rained in eight months. The Santa Ana winds kicked up, stirring a cyclone of flames that hurled embers the size of sparrows into the Pacific Palisades. The coastal enclave was home to Hollywood celebrities including Tom Hanks, Ben Affleck and Kate Hudson who, up until then, could be forgiven for thinking they’d landed in a particular slice of paradise: a walkable village in the land of freeways, nestled between the Pacific Ocean and the Santa Monica Mountains. The blaze was unrelenting, engulfing multimillion-dollar homes as it skipped from yard to yard. By the time it was fully contained, two-thirds of the neighborhood had been razed. Between the Palisades fire and another blaze ripping through the Los Angeles suburb of Altadena, the January wildfires were the most destructive in LA history.

News cameras broadcasting scenes of the wreckage to the rest of the country lingered on one freakish visual: A quaint shopping center called Palisades Village remained perfectly intact, while almost everything around it had burned. From afar, it seemed like a miracle. But the mall hadn’t been saved by providence. It was still standing because its owner, the real estate billionaire Rick Caruso, had hired private firefighters.

Caruso, until that point, was mostly just Southern California famous. He’d amassed a $5.8 billion fortune building open-air malls known for their relentlessly cheerful, Disneyfied aesthetic, with dancing fountains and sightseeing trolleys. He moonlighted in local politics, emerging as a civic fixer for a series of mayors who turned to him when they had a difficult or distasteful task they needed done. Caruso vied for office himself in 2022. He lost soundly and seemed to recede from view, a mogul without a public cause to champion.

The fires thrust Caruso back into the limelight, write John Gittelsohn and Patrick Clark, and a campaign might rise from the ashes: California’s Billionaire Mall King Is Becoming a Real Political Contender

One Key to Success: Meticulous Dumplings

CEO Albert Yang making dumplings at a new Din Tai Fung restaurant in Santa Monica, California. Photographer: Jessica Pons for Bloomberg Businessweek

Twenty-five years ago, a 19-table outpost of a popular Taiwanese restaurant set up shop in a suburban Los Angeles strip mall. Today—with 17 US locations and more on the way—it’s the top-earning restaurant chain in America.

Din Tai Fung, a staple of international and California dining that arrived on America’s East Coast just over a year ago, generates an annual average of $27.4 million per US location, according to industry researcher Technomic—almost triple what high-end restaurant group Nobu pulls in. Yet, when asked about it, Din Tai Fung North America’s chief executive officer, Albert Yang—almost too serious for his 32 years—humbly shrugs it off. “It’s definitely a proud achievement,” he says over a table overflowing with xiao long bao soup dumplings and other bite-size delights. “But it’s really not our ultimate goal.”

For our series A Walk With, Brent Crane visits with Yang and gets a lesson in dumpling production: How Din Tai Fung Became America’s Top-Earning Restaurant Chain

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Betting on Bets

$2 Billion

That’s how much Intercontinental Exchange Inc., owner of the New York Stock Exchange, plans to invest in cash in Polymarket, a crypto-based betting platform. The transaction values the company, which lets traders wager on the outcome of real-world events such as elections and sports, at roughly $8 billion.

‘Zombie’ Loans

“This gentleman shows up at our door and says, ‘I bought your house. You need to move out.’”

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