Argentina Blames US?

[Dante]

I guess the final gasp of yet another failed socialist utopia.Seems pretty common in South America. Find someone to blame for your incompetence.

 

http://news.yahoo.com/argentina-ruled-selective-default-bonds-p-203657630.html

[Nanker]

Well, borrowing money that you don't have the means to repay the lender(s) is all the rage around the world.

 

They're going to get a bailout... aren't they?

 

Edited August 1, 2014 by Nanker

[TPS]

Maybe you should do a little research before you pull out the "failed socialist utopia" tripe...

 

This has almost nothing to do with argentina's current economic situation, and more to do with the "bets" made by some significant financial players. They are right to blame the US judge and mediator for the mess.

[B-Man]

Related..................

 

Don’t Cry for Argentina — Cry for Us

by Stephen Moore

 

Thursday’s headline in the Los Angeles Times — “Argentina Defaults on International Debt” — spooked me, as it did investors. The stock market tanked on the news.

 

All Americans should feel the same apprehension. Argentina has about $200 billion in debt including billions in restructured bonds that it still can’t make payments on.

 

Now Argentina has to go hat in hand to its debtors to try to reach a new repayment deal. Standard and Poor’s declares that the nation is already in “technical default.” Interest rates and inflation are in double digits. The stock market collapsed 8.4 percent in one day. This is akin to a 1,000-point decline in the Dow Jones Industrial Average.

 

This is humiliating for a once rich nation. Argentina's economic minister Axel Kicillof says the nation now must negotiate with "vulture-funds" to remain solvent. It's a fiasco that was created by overspending, excessive borrowing, and the steady degrading of the currency.

 

Does any of this sound vaguely familiar? Our federal government has increased the national debt by more than $6 trillion over the past five years and the total debt is $17.6 trillion. I’m not a national-debt-phobiac, but these are numbers that should concern all Americans.

 

{snip}

 

No, we are not Argentina. We are not Greece. But America has not repealed the laws of finance. Debts must be paid. When they get too high, investors panic and start selling their bonds. Our interest rates today, thankfully, are low. But if rates rise by two percentage points more than projected — which would hardly be a giant surprise — the debt rises by another $3 trillion or so over ten years. Interest payments on the debt could become the single largest expenditure in the federal budget.

 

Argentina is blaming its creditors — in particular, the United States — for its financial meltdown. That’s nonsense. The Argentines only have themselves to blame.

 

So will we, if we don’t act soon to balance the budget and grow the economy.

 

— Stephen Moore is chief economist at the Heritage Foundation.

[TPS]

Related..................

sure, link an editorial from a biased source. Moore is so wrong it's not funny.

Most of the debt in question goes back to the 2001 crisis. Almost all of the creditors accepted a write down prior to 2010. A US hedge fund bought some of the outstanding debt on the cheap and has sued to get it fully re-paid. The US judge has sided with them, and since their payments to current creditors typically go through us banks, he has frozen their accounts. Argentina has significant reserves to make their payments, but this ruling that they can't pay anyone unless they also pay the vulture fund their 100% has caused them to be in technical default. This has now caused a CDS event, so players on both sides are now trying to get it worked out, not just the argentine government. Here's the kicker, and why Moore is an a$$, there is a clause that says if they pay the vulture fund 100%, then they have pay all those creditors who renegotiated in full, which creates a liability they can't cover! that very few nations could or would.

 

JPMorgan is said to be in negotiation with the vulture fund to buy its outstanding debt and end the non-sense. Of course, maybe it's because they are on the wrong side of the CDS bets? I wouldn't be surprised to learn that Elliot--the vulture fund--bought CDS.

 

If you're going to link something, at least provide something from a business outlet, not a right wing hack foundation...

[DC Tom]

sure, link an editorial from a biased source. Moore is so wrong it's not funny.

Most of the debt in question goes back to the 2001 crisis. Almost all of the creditors accepted a write down prior to 2010. A US hedge fund bought some of the outstanding debt on the cheap and has sued to get it fully re-paid. The US judge has sided with them, and since their payments to current creditors typically go through us banks, he has frozen their accounts. Argentina has significant reserves to make their payments, but this ruling that they can't pay anyone unless they also pay the vulture fund their 100% has caused them to be in technical default. This has now caused a CDS event, so players on both sides are now trying to get it worked out, not just the argentine government. Here's the kicker, and why Moore is an a$$, there is a clause that says if they pay the vulture fund 100%, then they have pay all those creditors who renegotiated in full, which creates a liability they can't cover! that very few nations could or would.

 

JPMorgan is said to be in negotiation with the vulture fund to buy its outstanding debt and end the non-sense. Of course, maybe it's because they are on the wrong side of the CDS bets? I wouldn't be surprised to learn that Elliot--the vulture fund--bought CDS.

 

If you're going to link something, at least provide something from a business outlet, not a right wing hack foundation...

 

So it's not because Argentina is a "socialist utopia" (note: I never thought they were). It's because a decade ago they structured a debt deal to nearly match the epic stupidity of the Giscard.

[Keukasmallies]

I guess the final gasp of yet another failed socialist utopia.Seems pretty common in South America. Find someone to blame for your incompetence.

 

http://news.yahoo.co...-203657630.html

 

Crap, I thought this thread was about Argentina, not the US!

[TPS]

 

 

So it's not because Argentina is a "socialist utopia" (note: I never thought they were). It's because a decade ago they structured a debt deal to nearly match the epic stupidity of the Giscard.

not at all. The debt in question was accumulated prior to the 2001 crisis. The restructuring was done in their favor. By 2010 all but about 7% of creditors accepted their terms. Vulture funds typically buy distressed debt on the cheap then sue hoping for a settlement that generates a hefty return. The judge ruled they can't pay the 93% owners unless they also pay the holdouts in full. Given some other legal issues, that ruling made it impossible for Argentina to make the payments to the 93%. Since the argentine govt is barred by its own law from dealing with holdouts directly, other entities are trying to resolve it--JPMorgan's offer to buy out the vultures for example. This will eventually work out in their favor and I'd suggest putting a little money in argentine stocks, despite that political hack moore's crap piece...

[Nanker]

not at all. The debt in question was accumulated prior to the 2001 crisis. The restructuring was done in their favor. By 2010 all but about 7% of creditors accepted their terms. Vulture funds typically buy distressed debt on the cheap then sue hoping for a settlement that generates a hefty return. The judge ruled they can't pay the 93% owners unless they also pay the holdouts in full. Given some other legal issues, that ruling made it impossible for Argentina to make the payments to the 93%. Since the argentine govt is barred by its own law from dealing with holdouts directly, other entities are trying to resolve it--JPMorgan's offer to buy out the vultures for example. This will eventually work out in their favor and I'd suggest putting a little money in argentine stocks, despite that political hack moore's crap piece...

I hope you're not a Registered Rep.

[TPS]

 

I hope you're not a Registered Rep.

no. I do have a license to opine though...

[Nanker]

That's fine. You were getting pretty close to the line there.

[DC Tom]

That's fine. You were getting pretty close to the line there.

 

I'd figured that out all on my own, anyway.

[GG]

sure, link an editorial from a biased source. Moore is so wrong it's not funny.

Most of the debt in question goes back to the 2001 crisis. Almost all of the creditors accepted a write down prior to 2010. A US hedge fund bought some of the outstanding debt on the cheap and has sued to get it fully re-paid. The US judge has sided with them, and since their payments to current creditors typically go through us banks, he has frozen their accounts. Argentina has significant reserves to make their payments, but this ruling that they can't pay anyone unless they also pay the vulture fund their 100% has caused them to be in technical default. This has now caused a CDS event, so players on both sides are now trying to get it worked out, not just the argentine government. Here's the kicker, and why Moore is an a$$, there is a clause that says if they pay the vulture fund 100%, then they have pay all those creditors who renegotiated in full, which creates a liability they can't cover! that very few nations could or would.

 

JPMorgan is said to be in negotiation with the vulture fund to buy its outstanding debt and end the non-sense. Of course, maybe it's because they are on the wrong side of the CDS bets? I wouldn't be surprised to learn that Elliot--the vulture fund--bought CDS.

 

If you're going to link something, at least provide something from a business outlet, not a right wing hack foundation...

 

Not quite correct on the deal particulars. Bottom line, if Argentina wanted to get the capital markets benefits from issuing bonds in NYS, then it should abide by NYS laws on dealing with creditors. If Argentina wasn't an economic basket case, there would have been no opportunity for Elliott to speculate in its bonds.

[TPS]

 

 

Not quite correct on the deal particulars. Bottom line, if Argentina wanted to get the capital markets benefits from issuing bonds in NYS, then it should abide by NYS laws on dealing with creditors. If Argentina wasn't an economic basket case, there would have been no opportunity for Elliott to speculate in its bonds.

bs. The strategy by HFs that do this is to buy the debt on the cheap, then sue and Hope for a settlement better than what they paid. It's not much different than what the majority of lawsuits are about--sue, hoping for an out of court settlement.

 

You are right about one thing, the opportunity arose when A was an economic basket case in 2001. It has nothing to do with the current state of its economy.

 

Here's a piece from today. Note two points related to what I mentioned in earlier posts, first, it raises the question of whether Elliot bought cds and would therefore benefit from the technical default, and second, third parties are trying to resolve it to get past some of the legal technical problems.

http://www.bloomberg.com/news/2014-08-04/argentine-default-sours-outlook-for-peso-as-talks-ordered.html

 

[GG]

bs. The strategy by HFs that do this is to buy the debt on the cheap, then sue and Hope for a settlement better than what they paid. It's not much different than what the majority of lawsuits are about--sue, hoping for an out of court settlement.

 

You are right about one thing, the opportunity arose when A was an economic basket case in 2001. It has nothing to do with the current state of its economy.

 

I'm not disputing the circumstances over how Elliott bought the bonds, but your characterization of Argentina options. Since there was no cram down of the non-consenting 7% bondholders, Argentina should have been paying them all along, like is the case nearly everywhere else where an entity doesn't get 100% participation in an exchange. Argentina is the one painting itself into a corner, and they have a few options left, other than wait until December 2014, as that's when the threat that the holders of the restructured notes will sue for a better deal goes away.

 

And I'm not referring to the 2001 Argentina economic basket case, but the perpetual Argentina economic basket case.

[....lybob]

bs. The strategy by HFs that do this is to buy the debt on the cheap, then sue and Hope for a settlement better than what they paid. It's not much different than what the majority of lawsuits are about--sue, hoping for an out of court settlement.

 

You are right about one thing, the opportunity arose when A was an economic basket case in 2001. It has nothing to do with the current state of its economy.

 

Here's a piece from today. Note two points related to what I mentioned in earlier posts, first, it raises the question of whether Elliot bought cds and would therefore benefit from the technical default, and second, third parties are trying to resolve it to get past some of the legal technical problems.

http://www.bloomberg...ks-ordered.html

There use to be the concept of odious debt in international law and I'm surprised debt racked up by Military junta that ran Argentina doesn't fall into that category.

[TakeYouToTasker]

There use to be the concept of odious debt in international law and I'm surprised debt racked up by Military junta that ran Argentina doesn't fall into that category.

Why would anyone loan money to the developing world under those conditions?

[TPS]

 

 

I'm not disputing the circumstances over how Elliott bought the bonds, but your characterization of Argentina options. Since there was no cram down of the non-consenting 7% bondholders, Argentina should have been paying them all along, like is the case nearly everywhere else where an entity doesn't get 100% participation in an exchange. Argentina is the one painting itself into a corner, and they have a few options left, other than wait until December 2014, as that's when the threat that the holders of the restructured notes will sue for a better deal goes away.

 

And I'm not referring to the 2001 Argentina economic basket case, but the perpetual Argentina economic basket case.

i for one have done more than my share in boosting their economy....Malbec anyone?

 

I think this ruling can hurt the us too, as more sovereign states will want to avoid issuing bonds using Wall Street banks in NYS.

 

There use to be the concept of odious debt in international law and I'm surprised debt racked up by Military junta that ran Argentina doesn't fall into that category.

i know its been used as the basis for some defaults, but in the end a sovereign state doesn't need a legal ruling, it simply decides not to pay. Ecuador used it in a partial default several years ago on debt the correa regime said was illegitimate. They are back in the market again this year.

[GG]

i for one have done more than my share in boosting their economy....Malbec anyone?

 

Time for a tasting at the home opener.

 

I think this ruling can hurt the us too, as more sovereign states will want to avoid issuing bonds using Wall Street banks in NYS.

 

Not for a while. The international bond markets aren't deep enough for crappy countries to raise debt, and if a country like Argentina needs to refinance, it has to go through NYS

[TPS]

 

 

Time for a tasting at the home opener.

 

I'll have a nice bottle available if you are doing your Elmwood crawl... Edited August 6, 2014 by TPS