Yesterday's Elections In Argentina Changed The Entire Game For Cristina Fernandez De Kirchner

Argentina President Cristina Fernandez de Kirchner's hopes of changing the country's Constitution to enable her to run for a third term have been dashed.

Yesterday the country held elections for its upper and lower legislative houses, and President Cristina Fernandez de Kirchner's party lost big. Her party garnered only 28% of the vote nation-wide, as opposed to the 54% it garnered in 2011.

Across the country, newspapers are calling this the "el fin de la hegemonía K" - "the end of the Kirchner hegemony."

CFK needed to keep a two-thirds majority in Congress to be able to change the Constitution with ease - that's how she passed the nationalization of YPF and other controversial legislation. Now her party only has a slight majority in both houses.

And what's worse for CFK, is that credible, as well as glamorous alternatives to her rule have been given even more legitimacy. Smiling, picture-perfect photos of Buenos Aires legislator Sergio Massa and his family are everywhere (check out a bunch of the newspaper covers here).

Massa's a former CFK friend - a cabinet chief turned dissident. Now he leads an anti-Kirchner wing of the Peronist party, and as representative of Argentina's most populous province - one that makes up 36% of the country's GDP - he'll have even more power. He beat CFK's hand-picked candidate for the lower house post by 12 points.

Massa has called for an end to arrogance and confrontation, which has given bond markets a signal that he'll negotiate payment for Argentina's debts, something CFK has not done.

Because of that, bond markets are warm to him. From Bloomberg:

Argentine dollar-bonds have rallied 14 percent since Massa won Aug. 11 primaries and the ruling alliance garnered about 30 percent of votes on expectations that Fernandez will be replaced by a more market-friendly president when she ends her mandate in 2015.

Massa has yet to announce his candidacy for the Presidency in 2015, but another opposition candidate, Buenos Aires Mayor Mauricio Macri, has.

Macri and his PRO party are even farther away from CFK in terms of his politics, and they managed to score a bunch of seats in the upper and lower houses yesterday.

Meanwhile, for the past few weeks CFK has been recovering from brain surgery due to a blood clot. She also has a heart condition, and some speculate that she'll need minor surgery for that in the coming months as well, according to MercoPress.

Bottom line, if CFK wants to stay on top, she'll need to come up with a new strategy to do it.