An interesting view on China.
[URL]http://www.miamiherald.com/2014/07/19/4243223/andres-oppenheimer-china-is-flexing.html[/URL]
Tres3.
Printable View
An interesting view on China.
[URL]http://www.miamiherald.com/2014/07/19/4243223/andres-oppenheimer-china-is-flexing.html[/URL]
Tres3.
It looks as if Argentina needs a poker lesson. Even a beginner knows that you do not bluff when every other player at the table knows what cards you are holding. It was worse than amateur night in Dixie.
[URL]http://www.bloomberg.com/news/2014-07-22/argentina-bond-judge-orders-continuous-talks-to-avoid-default.html[/URL]
Tres3.
[QUOTE=Tres3;440562]It looks as if Argentina needs a poker lesson. Even a beginner knows that you do not bluff when every other player at the table knows what cards you are holding. It was worse than amateur night in Dixie.
[URL]http://www.bloomberg.com/news/2014-07-22/argentina-bond-judge-orders-continuous-talks-to-avoid-default.html[/URL]
Tres3.[/QUOTE]Argentina does not need a poker lesson. Maybe another gouvernement in 17 months. THIS will happen.
It is completely unimportant for Argentina what this judge presumes to rule.
Maybe it's of interest for the legal bondholders.
Every country of this world had several defaults. Just Switzerland never dafaulted.
A country with en EXTERNAL debt of apro 10%, dept total of 40 - 49% (of PBI) which produces food for 200.000. 000 families, which owns the second highest shale-gas reserves. Will never default.
Maybe P. Singer (WHASP or catholic or Sciento or mormon or¿¿¿) will get a interesting lesson in real life.
"Never count the money, when you're sitting on the table. There 'll be time enough for counting, when the dealing is done".
P.D. "Where we better then...with our backs against the wall?" (Highwaymen)
[QUOTE=Spassmusssein;440565]It is completely unimportant for Argentina what this judge presumes to rule.[/quote]Yes, of course, because Argentina will continue it's tradition of fucking every body that evers does business with Argentina.
[QUOTE=Spassmusssein;440565]Maybe it's of interest for the legal bondholders.[/quote]I suggest that it's going to be of great interest to Argentina in the near future.
[QUOTE=Spassmusssein;440565]Every country of this world had several defaults. Just Switzerland never dafaulted.[/quote]Hey birdbrain, where exactly did you get this "information"? Care to share the link with the rest of us?
[QUOTE=Spassmusssein;440565]A country with en EXTERNAL debt of apro 10%[/quote]Only because Argentina fucked everybody who ever lent it money. It's easy to have a low ratio of external debt to GNP when you are continuously reneging on your debts
[QUOTE=Spassmusssein;440565]...which produces food for 200.000.000 families...[/quote]So where's the money from all those exports? Possibly in Christina's Swiss bank account?
[QUOTE=Spassmusssein;440565]...which owns the second highest shale-gas reserves...[/quote]And which Argentina has no idea how to extract with it's own technology, and no oil company with the technological expertise to do the job will ever do business with the Argentine Government that fucks every international corporation it can.
[QUOTE=Spassmusssein;440565]...Will never default...[/quote]Are you forgetting that Argentina has ALREADY defaulted on it's bonds in the past?
[QUOTE=Spassmusssein;440565]Maybe P. Singer (WHASP or catholic or Sciento or mormon or) will get a interesting lesson in real life.[/quote]I would suggest that it's going to be Argentina that "[I]will get a interesting lesson in real life[/I]".
[QUOTE=Spassmusssein;440565]"Never count the money, when you're sitting on the table. There 'll be time enough for counting, when the dealing is done".
P.D. "Where we better then...with our backs against the wall?" (Highwaymen)[/QUOTE]Sounds like gibberish to me.
If Spassmusssein does not understand the power of a federal district judge, whose ruling has been backed up by the Supreme Court, he is deluded or just plain stupid. Argentina may need a poker lesson, but Spassmusssein needs a civics lesson.
Tres3.
[QUOTE=Spassmusssein;440565]
Every country of this world had several defaults. Just Switzerland never dafaulted.
A country with en EXTERNAL debt of apro 10%, dept total of 40 - 49% (of PBI) which produces food for 200.000. 000 families, which owns the second highest shale-gas reserves. Will never default.
[/QUOTE]For that to be true you need a Gov't that's sane and interested in doing what's right for the country! Which we all know rules out ALL of the Gov'ts in the history of Argentina!
Hey Spass, in case you missed it the Chase Mellon bank in New York which is one of the primary centers for Argentina to disburse its payments to the bondholders who took a 70+% "haircut" refused to make that disbursement to those other bondholders and was told by that very same Federal Judge to return the money to Argentina.
While Argentina has substantial reserves, as Jackson pointed out, they have neither the capital nor the expertise and equipment to extract it.
www.en.wikipedia.org/wiki/List_of_sovereign_debt_crises
USA just defaulted 2 - 5 times, as the page publishes. As the link changes (as I saw) huugle it, you ll find all statistics about states-bancrupcy.
Even Phillip II defaulted 4 times in his career. His bondholders where from Genua, after that "Fugger" and "Welser". Finally Phillip II paid back good in good years, bad in bad years. An argentinean blueprint ;-=))
Lending out cash is just...betting on the ability of beeing payd back.
It's finally just "Johannes Calvin's fault" who allowed the bible, to take interests.
Nobody in this funny governement will take care to Griesas final desicion. Neither any Argentine citizen.
The bondholders that will accept beeing paid in Buenos Aires will hopefully get paid.
Insisting in getting paid in NY...might be just a hopefull wish.
Have a lovely mongering night!
[QUOTE=Tres3;440567]If Spassmusssein does not understand the power of a federal district judge, whose ruling has been backed up by the Supreme Court, he is deluded or just plain stupid. Argentina may need a poker lesson, but Spassmusssein needs a civics lesson.
Tres3.[/QUOTE]I can honestly say that I have never met a judge that I actually liked!
They are just such assholes when they are sitting across a bench from you!
One exception:
Judge Billy Reagan, Houston, Texas.
Wrote a pamphlet on how to beat a D.W.I in 1981 !
Great guy!
His son died of cirrhosis of the liver at 35 .
TL.
[QUOTE=Spassmusssein;440572]www.en.wikipedia.org/wiki/List_of_sovereign_debt_crises
USA just defaulted 2 - 5 times, as the page publishes.[/QUOTE]This page doesn't publish a US Sovereign Debt Default. It's lists several instances when the US had various financial crisis's, but it is not included in the list of nations that actually defaulted on debt as Argentina has. The page is called "List of sovereign debt crises" not "List of Sovereign Debt Defaults" Defaults are only one section of the page.
I'm not trying to get involved in this argument, I just didn't think the US had actually ever defaulted and wanted to check and see. When it did, your source says it hasn't.
The list for the USA has;
1. The instability of the Continental Dollar due to the English successfully counterfeiting them. (Fucking Brits, not good sport there at all)
2. Some obscure naval battle in Haiti (I'm not sure what that has to do with debt, it wasn't clear).
3. Roosevelt making the private ownership of gold illegal during the Depression.
4. Nixon suspending the convertibility of the dollar.
Let me get this straight. The vulture funds are not going to come to an agreement with Argentina, a technical default will ensue, and they will get nothing? I doubt they are going to cut off their nose to spite their face. What am I missing?
[QUOTE=Doppelganger;440571]Hey Spass, in case you missed it the Chase Mellon bank in New York which is one of the primary centers for Argentina to disburse its payments to the bondholders who took a 70+% "haircut" refused to make that disbursement to those other bondholders and was told by that very same Federal Judge to return the money to Argentina.
While Argentina has substantial reserves, as Jackson pointed out, they have neither the capital nor the expertise and equipment to extract it.[/QUOTE]This is very true. But what good does it do if the Gov't is a bunch of fools and every one has their hands in the cookie jar? If you want a close to home example, look at Chavez Land (Venezuela) . More proven reserves then any country in the world. And they can't even keep the population in toilet paper! Cristina land (Argentina) is slowly but surely following her once upon a time amigo into oblivion!
Argentina is a country rich in resources. Lets hope the people get some of it before the politicos piss it all away! And above all! Remember the pope is Argentine!! That and the Malvinas belong to Argentina! That and a SUBE card will get you down town! (But only if some one loaded some money onto the card!
Perhaps what happens on the international financial front will not make much difference to the average Argentine today, but in a country with heavily subsidized heating and electric industries where the government is having trouble funding those subsidies the recent increase in gas prices by a few hundred percent and the probability of the same for electric costs does make a difference. I see what is playing out in the US Federal Court can only hurt the countries financial footing, maybe you see it differently.
Argentine default looms. I do not know why the Argentine government keeps citing RUFO. A careful reading reveals that technically RUFO does not apply because the government would be complying with an "order". I think they are just trying to obfuscate matters, which is typical of Argentina.
[URL]http://finance.yahoo.com/news/argentine-default-looms-time-runs-125138382.html[/URL]
Tres3.
[QUOTE=Tres3;440567]If Spassmusssein does not understand the power of a federal district judge, whose ruling has been backed up by the Supreme Court, he is deluded or just plain stupid. Argentina may need a poker lesson, but Spassmusssein needs a civics lesson.
Tres3.[/QUOTE]As the mexican journalist Silvina Sterin Pinsel wrote Friday, old age not always is a warant for quality.
Usually with Whisky and Bordeaux-wines it is.
Obviously judge Griesa had / has problems, understanding the cause, his judgement and the consequences.
You can guumble it easily.
Anyway, there will not be great confusions, just the exchange "blue" will get down.
[QUOTE=Spassmusssein;440612]As the mexican journalist Silvina Sterin Pinsel wrote Friday, old age not always is a warant for quality.
Usually with Whisky and Bordeaux-wines it is.
Obviously judge Griesa had / has problems, understanding the cause, his judgement and the consequences.
You can guumble it easily.
Anyway, there will not be great confusions, just the exchange "blue" will get down.[/QUOTE]Sounds like MORE gibberish to me.
[QUOTE=Jackson;440620]Sounds like MORE gibberish to me.[/QUOTE]Dear forum-owner, if you love the definition "gibberish", really soo muuch,
have funfunfun + use it as foolish-gibberish everytime as you want 4 my posts.
As you are not so updatet and keen in macro-economy, quite more in rhetoric outblasts, I will stay "off limits" furthermore in this discussion.
Hope that your mansion and "Alamo" will have a big future. Even after the "(inexistent) default".
Next time in a house-party (if I would be invited still), I owe you a nice "champan" or "Malbec" if u want.
Why do you guys assume that the USA is the center of the universe. Do you know him? Have you ever talked with him about anything? He has be posting useful info on AP for many years. He lives and has made money in business in the provencia for a long time. He has many argentine friends and associates and might have a better feel for the word in the street than sex tourists.
Economically Argentina is playing with a loaded bomb. If they do not work within the USA federal court order, they are going to get fucked 1000 different ways.
Maybe the Chinese will help out the argentine government with 25% of the pompas humidas as collateral.
This board can use spas's posting more than he needs ap. Let's not lose another posting member over playing "quien es mas macho" on an internet chat board.
Every one has their opinion. In something like this discussion I doubt there is no concrete right or wrong answer. From what I see, if Cristinaland defaults, things will go on as they have been. The only reason they want their accounts in order so to speak is so they can borrow more money so that they can have a even bigger default in the future! The biggest issue is if Argentina continues as it has for so many years by just scraping by or if some one of intelligence takes the reins and makes this country into what it could be! Improve the little things. Paved roads, lighted streets, telephone system that is affordable and works, postal system that is affordable and works, a electric and gas distribution system that works like it should! Once again I could go on and on but some one should straighten out this country, it has great possibilities!
[QUOTE=Gandolf50;440627]Every one has their opinion. In something like this discussion I doubt there is no concrete right or wrong answer. From what I see, if Cristinaland defaults, things will go on as they have been. The only reason they want their accounts in order so to speak is so they can borrow more money so that they can have a even bigger default in the future! The biggest issue is if Argentina continues as it has for so many years by just scraping by or if some one of intelligence takes the reins and makes this country into what it could be! Improve the little things. Paved roads, lighted streets, telephone system that is affordable and works, postal system that is affordable and works, a electric and gas distribution system that works like it should! Once again I could go on and on but some one should straighten out this country, it has great possibilities![/QUOTE]I agree. Put a Margaret Thatcher type in charge and it would be amazing how Argentina would transform. They just need an attitude adjustment on government and what to expect from it.
[QUOTE=Dccpa;440629]I agree. Put a Margaret Thatcher type in charge and it would be amazing how Argentina would transform. They just need an attitude adjustment on government and what to expect from it.[/QUOTE]That is not only unlikely, it is nearly impossible.
Since even before Juan Peron wreaked havoc on the populace, those holding the reigns of power (regardless of political leanings), in Argentina, have been unified in their abuse of the populace for their continued power and prosperity. One of the conditions necessary to continue this exploitation of the country's people and resources is the limitation of information reaching the individual. This is achieved through both, the institutionalization of provincialism and by overwhelming the media with propaganda, thereby forcing any real information to the margins. A critical byproduct of this has been that a plurality of the citizenry has become structurally (I. E. Permanently) dependent upon the government for something that the individual believes (rightly or wrongly) that he can't provide for himself. Therefore, his well being is dependent upon perpetuation of the policies that got him into the predicament. When any philosophy, challenging the status quo (I. E. Keeping people in their place. Dependent upon the govt. And exploiting them) begins to propagate, it is ritualistically flogged in nearly 100% of the media until it is regarded by the populace as a periah. However, when the next shoe drops (in this sense, Argentina is a centipede or millipede), that philosophy (recently run out of town) will be blamed for whatever problems the govt has created. When all else fails, you will see articles about the Malvinas, splashed upon all of the media.
The current default is merely another act in the theater of the absurd. Kicillof shows up at the final moment, offers what is already known to be unacceptable and leaves. Miraculously, the "private" banking industry steps in and agrees to purchase all of the bonds at a price the govt can't pay without triggering the RUFO provisions of the exchange notes. Oddly, the RUFO rights expire this December. I am certain that the Argentine banks won't get a sweet deal from the govt for stepping in. Who pays for this? The people, of course.
I think that this quote from [URL]zerohedge.com[/URL] sums up Argentina's stance quite accurately:
[URL]http://www.zerohedge.com/news/2014-07-30/how-argentina-became-bad-debtor[/URL]
[QUOTE]Try to explain to your bank that since it was you who squandered your earnings for more than a decade, you have the right to not pay the mortgage with which you purchased your home.
When the bank takes you to court for not paying your mortgage, explain to the judge that you are a poor victim of evil money vultures and that you have the right to ignore creditors because you couldnt be bothered with changing your unsustainable spending habits.
When the judge rules against you, try to explain to the world in international newspapers how the decision of the judge is an injustice that endangers the international banking market (as the Argentine government has been doing recently).[/QUOTE]
I love Kicillof saying that this isn't a default because Argentina "paid" the interest payment. He leaves out the fact that Argentina knew full well that Griesa had enjoined BNY from forwarding any funds to the exchange note holders. That is like missing a mortgage payment because you left the money, for the bank, in an envelope that you buried in the back yard and sent the bank a note letting them know what you've done. Bonds have very explicit terms and conditions that are spelled out in the prospectus just like a home mortgage gives explicit instructions on how the bank will be repaid. The simple fact is that Argentina defaulted on its bonds and then only resolved the issue with 95% of the owners of those bonds (you know, the people who got screwed, investing in Argentina). The only problem is that the original agreement (the bonds on which the country defaulted in '01) applied to 100% of the bond holders and there were not provisions that would force the 5% to go along with the majority. Therefore, in '05 and '10, Argentina did not resolve its bond issues. It did a partial job and it left a very big problem unaddressed. The entire issue is based upon Argentina not standing up to the agreements to which it had previously committed.
What is most galling is that Kicillof then goes out and says that they can't address the legal claims (which Argentina claims are not rightfully theirs, despite the courts saying otherwise) of the holdouts because, they (the Govt) are so altruistic and honorable that they can't violate the terms of the agreements into which they entered in '05 and '10. So, they are committed to standing up to the obligations of the government, except for those instances that they are not willing to stand behind their obligations. Well, that makes sense...in Argentina.
I guarantee you that the "private" banks will get huge rewards, come next year and the 95% that holds the exchange notes will sue, claiming that the govt acted in bad faith and in collusion with the "private" banks and that they in fact did violate the RUFO, prior to 12,31, 2014 and therefore the entire class of exchange bonds is due equal treatment. When that shoe gets dropped, the sh*t is going to hit the fan. My guess is that after years of litigation, the 95% will win and Argentina will have $30B (or so) judgement handed down for the shenanigans that they are trying to pull off, now.
"Argentina Default Imminent as Talks Collapse".
[URL]http://online.wsj.com/articles/argentina-bonds-rise-to-multiyear-highs-on-prospect-of-deal-1406728458[/URL]
First off it was Argentina who offered the originally defaulted bonds in New York, knowing full well they would be subject to New York statutes governing such sales. Second it was Argentina that set the terms of those bonds. Now they come back complaining about the judge and laws in New York and about the terms and conditions of the bonds THEY DRAFTED AND SOLD.
In this article Why Argentina's default feels like American bullying, Don Pittis he tries to explain why maybe Argentina has a leg to stand on.
[URL]http://www.cbc.ca/news/business/why-argentina-s-default-feels-like-american-bullying-don-pittis-1.2724389[/URL]
Then he wrote this.
[QUOTE]In some ways it is disappointing that the New York courts have thrown their support behind the vultures and against the country trying to get its financial house in order.[/QUOTE]"Getting it's financial house in order," LOL.
Thanks for the laugh Don.
[QUOTE=Doppelganger;440664]First off it was Argentina who offered the originally defaulted bonds in New York, knowing full well they would be subject to New York statutes governing such sales. Second it was Argentina that set the terms of those bonds. Now they come back complaining about the judge and laws in New York and about the terms and conditions of the bonds THEY DRAFTED AND SOLD.[/QUOTE]And to add...
10 years ago, Argentina could have bought the very same bonds, at the exact same distressed price that the so called "Vultures" bought them, this being a common tactic exercised by financially distressed corporations.
Instead, Argentina decided to play a game of chicken in the New York State courts, apparently banking (no pun intended) on the idea that said courts would be as easily manipulated by political pressure and public opinion as the courts in Argentina.
They lost that gamble.
Thanks,
Jax.
[QUOTE=DaddyRulz;440674]In this article Why Argentina's default feels like American bullying, Don Pittis he tries to explain why maybe Argentina has a leg to stand on.
[URL]http://www.cbc.ca/news/business/why-argentina-s-default-feels-like-american-bullying-don-pittis-1.2724389[/URL]
Then he wrote this.
"Getting it's financial house in order," LOL.
Thanks for the laugh Don.[/QUOTE]They are trying to give the impression that they are trying to get their act together. But that is only so they can BORROW MORE MONEY! All they are doing is postponing payments on capital and paying on interest for now. They have some big payments coming up in the coming years when they HOPE they will be better off financially and will be able to pay. Of course every one knows that is a dream.
The part here that is truly outrageous is the judge's action to block the interest payments to the other bondholders. Argentina has the money to make those payments, but the judge blocked it, and further declared it illegal for anyone to help facilitate those payments. All in an attempt to strong-arm Argentina into paying the holdout funds. How does the judge get that kind of power? It's ridiculous. I am sure the other bondholders are pleased at getting their payments blocked.
Decisions like this support Argentina's claim that the judge is biased, and that the "talks" being ordered amount to extortion. Not surprisingly, the judge Thomas Griesa is a life-long Republican, appointed by a Republican president. And the holdouts are led by hedge fund titan Paul Singer, a conservative billionaire who has given millions of dollars to Bush and Romney.
The holdout funds do have a legal claim to their payment. But given the circumstances, the rulings of the judge go beyond the pale. He knows about the RUFO clause, but still insisted on forcing Argentina into default.
Wall Street is playing both sides here. The ISDA just determined that a credit event occured, triggering up to $1 Billion in payments on insurance that protects against default. Who sits on the ISDA committee? Singer's company and large US banks. How convenient. Who bought the insurance? Singer and large US banks? Somewhere in the US today, some very wealthy people are very pleased with judge Griesa. On Wall Street, it doesn't matter who gets hurt, as long as there is profit to be made.
[QUOTE=Esten;440689]The part here that is truly outrageous is the judge's action to block the interest payments to the other bondholders. Argentina has the money to make those payments, but the judge blocked it, and further declared it illegal for anyone to help facilitate those payments. All in an attempt to strong-arm Argentina into paying the holdout funds. How does the judge get that kind of power? It's ridiculous. I am sure the other bondholders are pleased at getting their payments blocked.
[/QUOTE][i]Law...is the opium of the masses, a mere construct devised by the bourgeois class to subjugate the proletariat[/i] - Karl Marx, the Communist Manifesto, 1848
[i]In his Tuesday speech, Axel Kicillof[/i] (Marxist Minister of the Economy who's "negotiating" with bondholders on behalf of Argentina)[i] mocked the concept of the "rule of law," saying this was designed to protect big business.[/i] -Reuters, April 20, 2012
Esten, I expect you to break out in song at any minute - "Don't Cry for Me Argentina" for the poor masses.
Where did the judge get the power, why Argentina gave it to him when no one would buy their debt issued under Argentine law they, Argentina, went to New York to issue the bonds so everyone would get a warm fuzzy buying Argentine bonds governed by New York law.
All the judge did was READ THE CONTRACT between the bondholders and Argentina, which I might add Argentina WROTE, and just like any other contract dispute in American courts he just ruled on what WAS IN THE CONTRACT.
I believe in Poland they would say "Tough Shitisky", Argentina wrote it, got the money and now they have to live with it.
By the way, I would not consider a reduction in value of 75%+ the other bondholders took to be a "haircut", I would consider it a decapitation!
[QUOTE=Esten;440689] Somewhere in the US today, some very wealthy people are very pleased with judge Griesa. On Wall Street, it doesn't matter who gets hurt, as long as there is profit to be made.[/QUOTE]Esten, Are you serious? If Kirchner and Kicillof would negotiate in good faith they could settle this for about $1 billion and move on. The benefit of avoiding default to Argentina would be worth much more than that. However, the Peronists have their eyes on elections in 2015, so the public and country be damned. They think this will win them votes. There are parallels in USA politics.
What do you think the effect would be on new issues of emerging market debt if investors believed courts would not attempt to enforce contract terms or repayment? There would be less issuance of debt and interest rates would be higher. Poor people would suffer. Griesa did the world a service.
This is an example of why some of us are confounded by the sanctimonious attitude of some on the left. You hurt the people you're trying to help.
I was actually working at a futures trading firm when the bonds in question were conceived. We traded mostly interest rates and currencies so we were interested in this issue. Hence I read the entire bond indenture and remember thinking that some of the provisions could end up tying the Argies' hands down the road. I don't remember all the specifics but the judge looked to this same indenture when making his decision. Esten has a point in that there is a conflict of interest since the default would be insured, but the Argies and their underwriters knew all of this going in, because it was all in the indenture for all the world to see. Watch the film 'Camila' for a good example of how Argies make decisions based on pride, greed, lust, etc. , but never based on logic or common sense.
Also they are lying about inventing the ballpoint pen (el birome). Both Biró and Meyne were Hungarian Jews who did not arrive in Argentina until three years after Biró had obtained a patent in the UK. So the inventors are not Argie and the ballpoint was not invented in Argentina. Carlos Gardel was French on both sides so eliminate him too. What does Argentina have left? Luis Firpo was pretty good, Juan Manuel Fangio was pretty good but every BA cab driver who thinks he is Fangio is unfortuately not, and you have a few athletes. Mollejas are okay but chinchulines are gross and mondongo is only tolerable. Maté is among the most wasteful and vapid culture practices one can think of, possibly a cut above chewing betel nut but not much, and of course argentinos do it in a gross and unsanitary fashion; note that the [I]bombilla[/I] is never shared in Uruguay.
I would feel sorry for the hard-working rank-and-file Argentinian doing their best to get ahead, if I had ever met any in the six and a half years I spent there. Hence the need for the verb 'zafar' which does not exist in other Spanish-speaking countries.
[QUOTE=Doppelganger;440693]
All the judge did was READ THE CONTRACT between the bondholders and Argentina, which I might add Argentina WROTE, and just like any other contract dispute in American courts he just ruled on what WAS IN THE CONTRACT.
[/QUOTE]This link to an article in The Atlantic might have been posted before, but I thought it was a good article that helped explain to me the why's of the Argentine default especially why the US courts have jurisdiction. In a nutshell, the writer reminds everyone that you "always read the contract" and you can't fault the judge's ruling because the 65 words in the contract are not ambiguous.
[URL]http://m.theatlantic.com/international/archive/2014/07/65-words-just-caused-argentinas-29-billion-default/375368/[/URL]
There was an interesting article last week in the Wall Street Journal on how the Kirchner's purportedly amassed a fortune while in the Casa Rosada with the help of a businessman, Lazaro Baez. Here's the link: [URL]http://online.wsj.com/articles/in-argentina-mix-of-money-and-politics-stirs-intrigue-around-kirchner-1406601002[/URL]. I was able to read it without logging in, but in case you're not, here are some highlights.
During the 11 years that Argentine President Cristina Kirchner and her husband Nestor Kirchner have dominated national politics, they accumulated a small fortune.
Between 2003, when Mr. Kirchner was elected president, and 2010, when he died, the couple's net worth rose from $2. 5 million to $17.7 million, according to their annual filings with the federal anticorruption office. A lot of people in Argentina want to know where that money came from.
Yet it is an investigation involving a construction baron with close ties to the Kirchners that is creating one of the biggest stirs. A Buenos Aires prosecutor alleged that the businessman, Lazaro Baez, plotted to launder some $65 million through a global network of shell companies. The prosecutor, Jose Maria Campagnoli, said in an interview the money likely was diverted from government funds earmarked for public works and that [B]Mr. Baez was acting on behalf of the Kirchners.[/B].
The prosecutor's investigation was cut short, however, when judicial authorities suspended him, accusing him of exceeding his jurisdiction and leaking information to the media. He denies the accusations, saying he is being persecuted for investigating corruption. He now is facing a judicial proceeding that could cost him his job.
Austral Construcciones SA, Mr. Beez's flagship construction company, was created weeks before Mr. Kirchner took office in 2003. Since the Kirchners moved into the Casa Rosada, the pink presidential palace in downtown Buenos Aires, Mr. Baez's company has received hundreds of millions of dollars in public-works contracts in Santa Cruz, becoming the province's top private-sector employer.
In April 2013, Argentine investigative journalist Jorge Lanata broadcast allegations about Mr. Baez's company on his popular news show. The program aired secretly recorded videotapes of Leonardo Faria, who said on the tapes that he managed a $5 billion fortune for Mr. Baez and acted as his courier.
In the tapes, the ponytailed, Ferrari-driving Mr. Faria said associates of Mr. Baez loaded bags of cash onto Mr. Baez's executive jet and carried them to Buenos Aires. There the money was taken to a financial firm informally called "La Rosadita," he said, just five blocks from the presidential Casa Rosada. There was too much cash to be counted by hand, he said, so it was weighed to determine its value, then sent abroad to tax havens. Mr. Faria also claimed to have played soccer and socialized with Mr. Kirchner.
Federico Elaskar, the owner of the financial firm, appeared on the program and backed up Mr. Faria's comments.
After the show aired, Messrs. Faria and Elaskar both retracted their statements, saying they had lied to Mr. Lanata. But the Buenos Aires prosecutor, Mr. Campagnoli, said his team verified their links to Mr. Baez and their involvement in an alleged money-laundering scheme that used a network of shell companies.
In a recent interview, [b]Mr. Campagnoli alleged that Mr. Baez was a frontman for the Kirchners, diverting funds earmarked for public-works projects. He said he requested raids on the Kirchner residences to collect evidence.[/b] The request was denied by a lower-court judge.
[QUOTE=Doppelganger;440693]
By the way, I would not consider a reduction in value of 75%+ the other bondholders took to be a "haircut", I would consider it a decapitation![/QUOTE]I consider it a theft, pure and simple. The Argentine government got 75% of the money the money for only 25% of the cost. Most corporations would have to declare bankruptcy, but all the Argentine government did was declare a default, and then get pissed off when not everyone went along with it. The pari passu contractual language was written by Argentina. All the judge is doing is enforcing the contract. Enforcement of contracts is only something the Argentines do if it suits them.
Tres3.
The language in the pari passu clause is clearly general and non-specific. It's right there in Yujin's link. It does not authorize blocking one creditor's payments to help another creditor. Doppel's claim that the judge just read the contract is more crapola. If the language was so clear, the judge's decision would not be challenged by the Euro bondholders.
What the judge did was [I]interpret[/I] the clause to mean that if Argentina paid one creditor, it had to pay all, which in this case meant paying some creditors 30 cents on the dollar and others 100 cents. That's a biased interpretation of "equal treatment", clearly benefiting the holdout hedge funds.
The judge's bias was again on display in demanding a settlement with the holdouts despite the RUFO clause. If there was no other option, the judge's hard line would be more reasonable, because the holdouts do have a legal right to their payment. However there were other options, not the least of which was simply waiting until Dec. 31 for the RUFO clause to expire. The holdouts have waited a decade for payment, surely they could wait another 5 months. But apparently the judge couldn't.
Of course, some judicial bias is to be expected. But here, the judge was willing to risk harm not only to Argentina, but also the other creditors by blocking their payments. Why did the judge force events in the direction of default, knowing Argentina would never risk violating the RUFO clause? Aside from the bias, spite, arrogance and ideology are all likely factors as well. Complicity in helping Wall Street make $1 Billion on credit default swaps? Unproven, but given the bizarre rigidity demonstrated here, it seems like a possibility.
[QUOTE=Esten;440707]The language in the pari passu clause is clearly general and non-specific. It's right there in Yujin's link. It does not authorize blocking one creditor's payments to help another creditor. Doppel's claim that the judge just read the contract is more crapola. If the language was so clear, the judge's decision would not be challenged by the Euro bondholders.
The judge's bias was again on display in demanding a settlement with the holdouts despite the RUFO clause. If there was no other option, the judge's hard line would be more reasonable, because the holdouts do have a legal right to their payment. However there were other options, not the least of which was simply waiting until Dec. 31 for the RUFO clause to expire. The holdouts have waited a decade for payment, surely they could wait another 5 months. But apparently the judge couldn't.
Of course, some judicial bias is to be expected. But here, the judge was willing to risk harm not only to Argentina, but also the other creditors by blocking their payments. Why did the judge force events in the direction of default, knowing Argentina would never risk violating the RUFO clause? Aside from the bias, spite, arrogance and ideology are all likely factors as well. Complicity in helping Wall Street make $1 Billion on credit default swaps? Unproven, but given the bizarre rigidity demonstrated here, it seems like a possibility.[/QUOTE]We don't know how many, if any, Supreme Court justices wanted to hear this case when Argentina tried to appeal it. However, given that they decided 7 to 1 to allow bondholders to issue subpoenas to banks to trace Argentine assets abroad, I suspect most or all of the justices would have sided with Griesa and the Second Circuit Court of Appeals. In other words, this probably wasn't even close. Apparently RUFO is only triggered if the payment to the holdouts is voluntary, and compliance with a court order is not voluntary. It will be interesting to see if Argentina will settle after December 31, when the RUFO clause expires. I seriously doubt the Peronists will settle before the next election.
Washington Post today on the "weird default". Point number "3" is interesting considering the insurance the hedge funds bought against default.
[URL]http://www.washingtonpost.com/blogs/wonkblog/wp/2014/08/03/everything-you-need-to-know-about-argentinas-weird-default/[/URL]
[QUOTE=Esten;440707]The language in the pari passu clause is clearly general and non-specific. It's right there in Yujin's link. It does not authorize blocking one creditor's payments to help another creditor. Doppel's claim that the judge just read the contract is more crapola. If the language was so clear, the judge's decision would not be challenged by the Euro bondholders.
What the judge did was [I]interpret[/I] the clause to mean that if Argentina paid one creditor, it had to pay all, which in this case meant paying some creditors 30 cents on the dollar and others 100 cents. That's a biased interpretation of "equal treatment", clearly benefiting the holdout hedge funds.
The judge's bias was again on display in demanding a settlement with the holdouts despite the RUFO clause. If there was no other option, the judge's hard line would be more reasonable, because the holdouts do have a legal right to their payment. However there were other options, not the least of which was simply waiting until Dec. 31 for the RUFO clause to expire. The holdouts have waited a decade for payment, surely they could wait another 5 months. But apparently the judge couldn't.
Of course, some judicial bias is to be expected. But here, the judge was willing to risk harm not only to Argentina, but also the other creditors by blocking their payments. Why did the judge force events in the direction of default, knowing Argentina would never risk violating the RUFO clause? Aside from the bias, spite, arrogance and ideology are all likely factors as well. Complicity in helping Wall Street make $1 Billion on credit default swaps? Unproven, but given the bizarre rigidity demonstrated here, it seems like a possibility.[/QUOTE]Esten, what do you think pari passu means? It is not open for interpretation as you falsely allege. Argentina wrote the clause and must live by the literal meaning, not an "interpretation". RUFO only applies if the payment is VOLUNTARY, not if the government is complying with an order. The order in the instant case was Judge Griesa's, supported by an Appeals Court, and the Supreme Court. We know that you hate Wall Street, but do not let your hatred lead to the same obfuscation as the Argentine Government. No one is blocking one person's payment to help another, and credit default swaps are nothing more than a form of insurance. In simplistic terms, which maybe you will understand, one insures his automobile against collision loss, and one insures his sovereign bonds against default loss.
Tres3.