Argentine Economy

[Thomaso276]

Does Kicillof look and sound like Baghdad Bob? I always wondered what happened to that guy.

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.

[Dccpa]

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.".

Does Kicillof look and sound like Baghdad Bob? I always wondered what happened to that guy.

[Tres3]

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.".

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.

[Gandolf50]

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.”".

[Daddy Rulz]

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.

[Dickhead]

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.

[Tres3]

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!

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.

[DavieW]

...this country is doomed to continue being ignorant and stupid!

FTFY!

(Fixed That For You.).

[Gandolf50]

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.

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!

[DavieW]

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.

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!

[Dickhead]

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.

[Tres3]

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 proving they had violated the equal treatment clause!

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.

[Dickhead]

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 pari passu (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 pari passu 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 both types of clauses. Here is the exact pari passu 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 pari passu 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 pari passu; 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 proving they had violated the equal treatment clause!

[Tres3]

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

http://www.bloomberg.com/news/2014-1...tml?cmpid=yhoo

Tres3.

[Jackson]

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.

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.