Argentine Economy

[QUOTE=Esten;441587]The day he blocked legal payments to a majority group of bondholders, to help the holdout Vulture funds. He could have slapped contempt charges and penalties on Argentina without doing this and forcing a technical default. But he's pretty much accountable to nobody, and so can pretty much do what he wants.

As a federal judge he can't be fired. The only recourse would be for Congress to remove him through a lengthy process called impeachment and conviction. Which has only happened a few times in U.S. history. And there's no chance of that happening with a Republican House, since Judge Griesa is a Republican, and Paul Singer is a Republican and a major donor to Republicans.

Apparently Griesa has a history of arrogance and abuse of judicial power. As evidenced by statements from other lawyers and judges at the link below.

Federal judges cannot be fired and have no mandatory retirement age
[URL]http://the-tap.blogspot.com/2014/06/federal-judges-cannot-be-fired-and-have.html[/URL][/QUOTE]That is why the USA has an appellate process. But did not that process uphold Judge Griesa? We are lucky that federal judges have lifetime tenure. Lifetime tenure gives them some insulation from the political process, and they cannot be fired by a politician. Was not the fact that USA judges have immunity one of CFK's complaints?

Tres3.

[QUOTE=Tres3;441590]That is why the USA has an appellate process. But did not that process uphold Judge Griesa? We are lucky that federal judges have lifetime tenure. Lifetime tenure gives them some insulation from the political process, and they cannot be fired by a politician. Was not the fact that USA judges have immunity one of CFK's complaints?

Tres3.[/QUOTE]The US Supreme Court upheld Griesa's rulings in this case. Esten would like us to ignore the facts and look at the bright shiny object he is holding. The anonymous complainers were most likely attorneys that got their asses kicked in Griesa's court. I wonder if any of the anonymous complaints were written by Christina's minions. Regardless, she is getting her ass kicked in this case and is looking crazier and more desperate by the minute.

http://dealbook.nytimes.com/2014/06/16/supreme-court-denies-appeal-by-argentina/?_php=true&_type=blogs&partner=rss&emc=rss&_r=0

[QUOTE=Esten;441587]The day he blocked legal payments to a majority group of bondholders, to help the holdout Vulture funds. He could have slapped contempt charges and penalties on Argentina without doing this and forcing a technical default. But he's pretty much accountable to nobody, and so can pretty much do what he wants.

As a federal judge he can't be fired. The only recourse would be for Congress to remove him through a lengthy process called impeachment and conviction. Which has only happened a few times in U.S. history. And there's no chance of that happening with a Republican House, since Judge Griesa is a Republican, and Paul Singer is a Republican and a major donor to Republicans.

Apparently Griesa has a history of arrogance and abuse of judicial power. As evidenced by statements from other lawyers and judges at the link below.

Federal judges cannot be fired and have no mandatory retirement age
[URL]http://the-tap.blogspot.com/2014/06/federal-judges-cannot-be-fired-and-have.html[/URL][/QUOTE]Why should he be fired? Because he did his job?? Because he enforced a contract that was mostly written by Argentina because they were desperate for money at any price and they were out of options? And now the people who put up the money would like it back almost 15 years later? Give the old coot a medal for putting up with all this bull $hit!

[QUOTE=Esten;441587]The day he blocked legal payments to a majority group of bondholders, to help the holdout Vulture funds. He could have slapped contempt charges and penalties on Argentina without doing this and forcing a technical default. But he's pretty much accountable to nobody, and so can pretty much do what he wants.

As a federal judge he can't be fired. The only recourse would be for Congress to remove him through a lengthy process called impeachment and conviction. Which has only happened a few times in U.S. history. And there's no chance of that happening with a Republican House, since Judge Griesa is a Republican, and Paul Singer is a Republican and a major donor to Republicans.

Apparently Griesa has a history of arrogance and abuse of judicial power. As evidenced by statements from other lawyers and judges at the link below.

Federal judges cannot be fired and have no mandatory retirement age
[URL]http://the-tap.blogspot.com/2014/06/federal-judges-cannot-be-fired-and-have.html[/URL][/QUOTE]Actually, the facts are:

First, the judge ruled the only way he could, given that by Argentina's decision those bonds DO NOT have a Collective Action Clause (CAC). The judge had no alternative but to enforce the contract.

Second, the Appeals Court had no grounds to overturn such a straigthfoward ruling.

Third, the Supreme Court could not possibly agree to hear the case as there are no constitutional matters at stake here.

Finally, the ruling justified the USA Reputation as a safe haven subject to the rule of law, regardless of how much some liberals would prefer to replace that by political fiat.

Thanks,

Jax

[URL]http://www.bbc.co.uk/news/entertainment-arts-29474422[/URL]

Top gear is one of England's most viewed TV programs.

I'm not sure this will entice many people to take their holidays in Argentina in the near future.

[QUOTE=Jackson;441605]First, the judge ruled the only way he could, given that by Argentina's decision those bonds DO NOT have a Collective Action Clause (CAC). The judge had no alternative but to enforce the contract.[/QUOTE]Citigroup went to court to appeal Griesa's order, saying he abused his discretion in blocking payments.

Show us where in the contract does it state that existing payments be blocked to enforce pari passu. If you can't, we can only conclude that Griesa used (and abused) his discretion.

[QUOTE=Esten;441615]Citigroup went to court to appeal Griesa's order, saying he abused his discretion in blocking payments.

Show us where in the contract does it state that existing payments be blocked to enforce pari passu. If you can't, we can only conclude that Griesa used (and abused) his discretion.[/QUOTE]That was in response to Argentina's abuse, rudeness, lies and outright thievery. Argentina (Cristina) thinks she can do what ever she wants and that every one else needs to do what she wants. She does not want to pay anyone in full. She will not even talk about paying in full. Only if she is looking at a steep discount is she willing to talk. But at the same time she wants new loans and she wants to be able to point out that she is paying on all old loans!

[QUOTE=Esten;441615]
Show us where in the contract does it state that existing payments be blocked to enforce pari passu..[/QUOTE]You obviously do not know what pari passu means.

Tres3.

Another court order for CFK to ignore and rant about.

[URL]http://finance.yahoo.com/news/u-judge-orders-argentina-stop-servicing-exchange-bonds-233659721--sector.html[/URL]

Tres3.

More on the President's Ranting.

[URL]https://news.vice.com/article/how-crazy-are-argentina-presidents-hints-of-a-us-plot-to-remove-her[/URL]

CFK and her cohorts just do not get it.

[URL]http://www.bloomberg.com/news/2014-10-09/bank-rates-topping-25-can-t-quell-peso-exodus-argentina-credit.html?cmpid=yhoo[/URL]

Tres3.

It looks as if Kicillof is CFK's anointed successor.

[URL]http://www.miamiherald.com/news/business/international-business/[/URL]

Tres3.

[QUOTE=Esten;441615]Citigroup went to court to appeal Griesa's order, saying he abused his discretion in blocking payments.

Show us where in the contract does it state that existing payments be blocked to enforce pari passu. If you can't, we can only conclude that Griesa used (and abused) his discretion.[/QUOTE]Let me explain this to you.

"Pari passu" means that all bondholders must be treated equally by the bond issuer.

Among other things, it means that the bond issuer can't pick and choose who it will pay I. E. "We like bondholders A, C and C, so we will pay them, and because we don't like bondholders D, E and F we will tell them to "fuck off".

That's a good thing. That's why all bond buyers want "pari passu" clauses in the bonds they buy. For the bond issuers it keeps the interest rates lower as the bonds are perceived as being more secure.

In this case, Argentine decided that it would ignore the "pari passu" clause in the bonds that they authored and sold, and instead decided to pay those bondholders who agreed to the haircut while simultaneously telling the holdout bondholders to "fuck off".

Judge Griesa agreed with the holdouts that a) their bonds were valid and that Argentine owed them the full amount stipulated therein, and b) that they were not being treated equally with the other bondholders who were in fact getting paid (abet at a reduced rate). Accordingly, he correctly ordered that nobody could get paid unless everybody got paid in accordance with the bond's conditions.

Of course, Argentina can settle the lawsuit with the holdout bondholders by paying them in full as stipulated in the bonds. Unfortunately for the exchange bondholders, I suspect that they waived their rights to full payment when they accepted the exchange bonds, but that's their problem.

Thanks,

Jax.

More BS from Kicillof. I wonder why he did not name the potential "investors" and the amounts they would loan Argentina?

[URL]http://www.bloomberg.com/news/2014-10-10/argentina-has-offers-from-investors-for-financing-kicillof-says.html?cmpid=yhoo[/URL]

Tres3.

One of the more ironic aspects of this whole bond debacle is that when Argentina wrote the bonds, they included a "most favored creditor" clause to increase the marketability. But, and I know everyone will find this difficult to believe, they fucked it up. They left out the word "settlement" and that single omission meant the exchange bondholders weren't protected from Argentina making a settlement with the holdout bondholders. But Argentina then passed another law that prevented Argentina from re-opening the exchange process. That law, known as the Lock Law, is what was held to violate the equal treatment clause (along with the payments to the exchange bondholders).

So [I]pari passu[/I] (equal treatment or rank) has two possible elements: an internal element, meaning that each bond within a tranch is equal to each other bond in the tranch; and an external element, meaning that Tranch X ranks equally with other existing debentures (mortgage bonds don't have or need [I]pari passu[/I] clauses) and / or with future issues. Typically, depending on state law, you can then still take a future issue and give it a subordination clause. Importantly, the Argentine bonds that were defaulted on contained [B]both[/B] types of clauses. Here is the exact [I]pari passu [/I]clause from the bonds:

"The Securities will constitute ... direct, unconditional, unsecured and unsubordinated obligations of the Republic and shall at all times rank pari passu and without any preference among themselves. The payment obligations of the Republic under the Securities shall at all times rank at least equally with all its other present and future unsecured and unsubordinated External Indebtedness (as defined in this Agreement)."

Pretty clear, I would say. Since it says "at least" equally, we see that future issues can indeed be subordinated. But that isn't relevant except in the case of the exchange bonds. I haven't found out yet whether the exchange bonds have a subordination clause. The seminal case dealing with [I]pari passu[/I] is the "Elliott" case, where a holdout investment fund succeeded in blocking Per from making payments to other bondholders on a 'restructuring' of the debt. That was an EU decision, but was based on New York law. And, since Argentina was not astute enough to include a collective action clause in the original bonds, putting one in the exchange bonds would also violate [I]pari passu[/I]; Greece, in similar circumstances, was able to put the 'haircut' to a vote and hence force the holdouts to accept the reduced principal repayment, because they had one of these clauses.

Then, for reasons that are unclear but appear to be related to having a lock on stupid, Argentina proceeded to (repeatedly) file 18k reports with the SEC in which it specifically referred to the holdout creditors as comprising a separate category. Thus, they basically filed a sworn form [B]proving[/B] they had violated the equal treatment clause!

[QUOTE=Dickhead;441712]
Then, for reasons that are unclear but appear to be related to having a lock on stupid, Argentina proceeded to (repeatedly) file 18k reports with the SEC in which it specifically referred to the holdout creditors as comprising a separate category. Thus, they basically filed a sworn form [B]proving[/B] they had violated the equal treatment clause![/QUOTE]You cannot cure stupid. I do not think anyone with a modicum of intelligence ever accused the Argentine government of having a single rocket scientist on its payroll, much less someone with intelligence. They fired all of the smart people, or the smart people resigned. Unfortunately, it has been this way since before Peron. Peron and his successors only made matters worse by giving decision making power to stupid, sycophantic, inept, yes men.

My dos centavos worth.

Tres3.

The chance of finding a cure for stupid might increase slightly (or not) if they would send their children to school for more than four hours a day. That'd be like having 110 days of school a year in the US.

[QUOTE=Dickhead;441714]The chance of finding a cure for stupid might increase slightly (or not) if they would send their children to school for more than four hours a day. That'd be like having 110 days of school a year in the US.[/QUOTE]Hear, hear!

Having just taken my son from the (so called) Argentinian education system to the British education system, the difference is an embarrassment. He's in year two, but has had to be grouped with the pre-schoolers for reading and writing. He's not dumb - they just hadn't started on reading and writing yet at his school in Argentina!

[QUOTE=Dickhead;441714]The chance of finding a cure for stupid might increase slightly (or not) if they would send their children to school for more than four hours a day. That'd be like having 110 days of school a year in the US.[/QUOTE]True, four hours a day. Fifteen minutes or so in the morning for attendance etc. Thirty minutes or so of "school" . One hour outside for unsupervised "play time" . Forty five minutes or more for a "snack". That leaves another hour and a half of class time before they spend fifteen minutes cleaning up and getting their things together. So out of four hours a day, they get two hours of class time (if they are lucky). That and most of the teachers dont even have a "teaching" degree. How much are these kids learning??? A friend of mine who is now teaching got his job in a bi-lingual school based on the fact he spoke really good english and that he had a college degree in "something". In his case , economics. Most of these kids turn into parasites on the Argentine economy because when they leave school they cannot read well, or write well, and in many cases do not even speak well. What can they do besides drive a bus or work construction? I am assuming (hoping?) that the schools in the city are better then they are out here on the boonies (provincia). If not this country is doomed to be ignorant and stupid!

[QUOTE=Gandolf50;441716]...this country is doomed to continue being ignorant and stupid![/QUOTE]FTFY!

(Fixed That For You.).

[QUOTE=DavieW;441715]Hear, hear!

Having just taken my son from the (so called) Argentinian education system to the British education system, the difference is an embarrassment. He's in year two, but has had to be grouped with the pre-schoolers for reading and writing. He's not dumb - they just hadn't started on reading and writing yet at his school in Argentina![/QUOTE]If we keep "Dumbing Down" in the USA schools, it will not be too long before we are just like Argentina, and other Latin countries.

Tres3.

On dumbing down in the US (slightly off topic but hey): I had three separate teaching stints separated by gaps of 7-8 years. I taught one particular upper division course during all three stints, using succeeding editions of the leading text in the field. The first stint, the material was similar to what I studied in undergrad, which was not too surprising since not much time had passed. Then in stint two, I noticed that a lot of the more challenging material had been moved to appendices. By the third stint, that material was gone completely.

I also taught at the college I graduated from, about twenty years later. By then, in the business school they had removed the calculus requirement, the foreign language requirement, the keyboarding test, and lord knows what else. The day I finally decided my career was over was when I stopped what I was doing and said to my class of business majors, "What's seven times eight?"

The blank looks told me all I needed to know.

I recently took an associate degree from a Jr. College in the US and A. The course work in my high school was much harder back in the days of hairy pussies and Pat Benatar.

I wasnt sure if I should put this in the jokes thread or under Argentine economy.........

"Argentina is not precluded from international credit, it has decided not to take it’.

Economy Minister Axel Kicillof has assured that the government is not seeking international financing despite current economic problems. “Argentina is not precluded from international credit, but it has decided not to take it,’ he stated.

“The government is not against external financing, the problem are its sources, the conditionalities tied to these loans,” Kicillof said in an interview with local Página/12 newspaper.

The minister said that the country has achieved foreign trade surpluses and that it “has the foreign exchange needed to face debt maturities.”.

“Historically, Argentina’s development was subjected to recurrent trade balance crisis,” the official said. “Development processes intensively use foreign currency.”.

Kicillof explained that “the mediocre growth of global economy, trade and of the economies of emerging countries” has affected Argentina since it is not “free from the evolution of Brazil’s, Europe’s and China’s growth rates.”".

[QUOTE=Gandolf50;441728]I wasnt sure if I should put this in the jokes thread or under Argentine economy.........

"Argentina is not precluded from international credit, it has decided not to take it.

Economy Minister Axel Kicillof has assured that the government is not seeking international financing despite current economic problems. Argentina is not precluded from international credit, but it has decided not to take it, he stated.

The government is not against external financing, the problem are its sources, the conditionalities tied to these loans, Kicillof said in an interview with local Pgina/12 newspaper.

The minister said that the country has achieved foreign trade surpluses and that it has the foreign exchange needed to face debt maturities..

Historically, Argentinas development was subjected to recurrent trade balance crisis, the official said. Development processes intensively use foreign currency..

Kicillof explained that the mediocre growth of global economy, trade and of the economies of emerging countries has affected Argentina since it is not free from the evolution of Brazils, Europes and Chinas growth rates.".[/QUOTE]Kicillof has either been smoking weed or is spouting CFK propaganda for the consumption of the LIV Argentine voters, or both. If it were not so serious, I would definitely put it in the jokes thread. An Argentine friend told me that Argentina was ungovernable, and I am beginning to believe him. The people in government are too stupid to govern the country, but not too stupid to steal.

Tres3.

[QUOTE=Gandolf50;441728]I wasnt sure if I should put this in the jokes thread or under Argentine economy.........

"Argentina is not precluded from international credit, it has decided not to take it.

Economy Minister Axel Kicillof has assured that the government is not seeking international financing despite current economic problems. Argentina is not precluded from international credit, but it has decided not to take it, he stated.

The government is not against external financing, the problem are its sources, the conditionalities tied to these loans, Kicillof said in an interview with local Pgina/12 newspaper.

The minister said that the country has achieved foreign trade surpluses and that it has the foreign exchange needed to face debt maturities..

Historically, Argentinas development was subjected to recurrent trade balance crisis, the official said. Development processes intensively use foreign currency..

Kicillof explained that the mediocre growth of global economy, trade and of the economies of emerging countries has affected Argentina since it is not free from the evolution of Brazils, Europes and Chinas growth rates.".[/QUOTE]Does Kicillof look and sound like Baghdad Bob? I always wondered what happened to that guy.

[QUOTE=Dccpa;441740]Does Kicillof look and sound like Baghdad Bob? I always wondered what happened to that guy.[/QUOTE]According to WIKI : Although questioned by American authorities, al-Sahhaf was released, and there has been no suggestion of charging or detaining him for his role in the Saddam Hussein government. He is now living in the United Arab Emirates with his family.

The Argentine government needs to get its act together if CFK's party is to stand a chance in the 2015 elections.

[URL]http://www.bloomberg.com/news/2014-09-04/argentine-bean-hoarding-epidemic-building-after-default.html[/URL]

Tres3.

Anyone, including an Argentine, who touches this offer with a ten foot pole ought to have his head examined.

[URL]http://www.bloomberg.com/news/2014-10-20/argentina-planning-1-billion-dollar-linked-bond-sale.html?cmpid=yhoo[/URL]

Tres3.

[QUOTE=Tres3;441858]Anyone, including an Argentine, who touches this offer with a ten foot pole ought to have his head examined.

[URL]http://www.bloomberg.com/news/2014-10-20/argentina-planning-1-billion-dollar-linked-bond-sale.html?cmpid=yhoo[/URL]

Tres3.[/QUOTE]The want to sell the bonds in dollars and repay them in pesos at the official rate? Are you fucking kidding me? The article does say they promise not to devalue the peso, so I'm sure that will work out fine.

I've got to get into the Sovereign Debt business.

No I think that they are Peso Bonds with a return of capital based on change in the Official Dollar Exchange rate.

So if/when Argentina devalues, this will enhance the return on the bonds.

Both the article Tres3 posted from Bloomberg and the article in the Buenos Aires Herald clearly stated:

The bonds are to be denominated in US Dollars.

The bonds are to be paid in Argentine Pesos at the OFFICAL EXCHANGE RATE, there was no guarantee in the Herald article on the official rate not being changed either up or down.

The bonds are to pay a whopping 1.75%.

The bonds will be governed by Argentine Law.

What could possibly go wrong?

If I understood this right, they are going to re-calibrate the amount on which the 1.75% is paid by the change in the official exchange rate. Example for a $1,000 bond: Official rate starts out at say 8 to 1 so the $1,000 bond is worth 8,000 pesos and the interest is (8,000 x .0175) = 140 pesos. Now after a year the rate is 10 to 1. The bond is worth 10,000 pesos and the interest will be (1,000 x .0175) = 175 pesos. That's why that Argie politician says the holders will "benefit" if the currency is devalued. They will get more pesos. But hello, the devaluation was because of inflation and 175 devalued pesos aren't any better than 140 undevalued pesos. Plus they get screwed the whole time period between the adjustments because the coupon is based on the beginning of the period calculation.

So it's hard to see anyone buying these bonds. Yet, people buy lottery tickets. In my state, lottery tickets say right on the front: "Prizes equal 50% of sales." I say to my friends who buy lottery tickets, "Just give me a dime and I will give you a nickel and you will be better off." Why better off and not just the same? Because gambling is heads you lose, tails you win and pay taxes. Winnings are taxable and losses can't be deducted unless you are a professional gambler and even then you have to already be itemizing AND the loss has to exceed 2% of income. So really if you buy a lottery ticket in my state your return on a dollar is fifty cents minus the tax on fifty cents.

I guess you could win if the devaluation was way more than the inflation during the holding period. That could happen if the devaluation was long overdue, which it is, so maybe that is the potential appeal. Buy the bonds, eat some inflation, dump right after the devaluation and hope to come out ahead.

Christ, what do you invest in if you're an Argie? Real estate is so illiquid because of the lack of financing. The banks aren't safe. The bonds aren't safe. Their stock market is all fucked up. I guess you hold precious metals. Then your apartment gets broken into and your insurance won't pay off and you jump out a window.

Do Argie insurance companies ever even pay off?

[QUOTE=Dickhead;441862]

Christ, what do you invest in if you're an Argie? [/QUOTE]If you are a smart Argie (I think that is an oxymoron), you invest in dollars, and pray that they are not stolen.

Tres3.

[QUOTE=Dickhead;441862]Christ, what do you invest in if you're an Argie?[/QUOTE]You don't invest as such, you make money in the same way as the political elite - you steal it.

[QUOTE=Dickhead;441862]


Do Argie insurance companies ever even pay off?[/QUOTE]I really doubt it. I know when you have a car accident there is a ten year wait to collect, if you ever collect. (they spend ten years dreaming up ways to cheat you!) Do they mention who is the insurer? My guess is either there is no insurance or they wont pay the premium so the carrier wont pay. Either way you dont get paid.

Surprise, Surprise.

[URL]http://www.bloomberg.com/news/2014-10-16/argentina-black-market-proving-irresistible-to-tourists.html[/URL]

Tres3.

[QUOTE=Tres3;441866]Surprise, Surprise.

[URL]http://www.bloomberg.com/news/2014-10-16/argentina-black-market-proving-irresistible-to-tourists.html[/URL]

Tres3.[/QUOTE]Probably so for Latin Americans but not so much from other foreigners. Now if they devalued and tightened the spread between markets, that would be a tourism boom.

[QUOTE=Riina;441880]Probably so for Latin Americans but not so much from other foreigners. Now if they devalued and tightened the spread between markets, that would be a tourism boom.[/QUOTE]Why would it?

[QUOTE=Moore;441884]Why would it?[/QUOTE]Dual exchanges would be perceived as a risk by most tourists. I like budgets when I travel and like to limit the unknowns.