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Montevideo, September 22nd 2018 - 01:47 UTC

Countdown for Argentina's decisive litigation with hedge funds; IMF concern

Friday, June 6th 2014 - 08:49 UTC
Full article 47 comments

The International Monetary Fund expressed “concern” on Thursday over the outcome of Argentina's 'vulture funds' case. The US Supreme Court is scheduled to consider on June 12 whether to hear Argentina's appeal of rulings requiring it to pay the holdout bondholders back in full. Read full article

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  • british bomber

    Here's hoping that the USSC take the case and eventually find for the 93%. Otherwise we will be dealing with default and bonds in BA.

    Jun 06th, 2014 - 09:10 am - Link - Report abuse 0
  • La Patria

    @1 If it doesn't find for the 93%, I'd recommend buying up cigarette cartons and using them to deal with for day to day stuff.....it's always worked before

    Jun 06th, 2014 - 09:26 am - Link - Report abuse 0
  • british bomber

    @2
    What are you talking about?

    Jun 06th, 2014 - 09:34 am - Link - Report abuse 0
  • yankeeboy

    I wonder who these “specialists” are because here in the USA nobody thinks Argentina has a chance of winning this.
    I think the best Arg can hope for is a delay.
    I don't know what that does for SCOTUS though, why would they bother?
    It is easiest to send it back to NY and be done with it without ever having to rule.
    BCRA is really worried that there will be a run on the peso next week.
    Tick tock tick tock

    Jun 06th, 2014 - 10:00 am - Link - Report abuse 0
  • Welsh Wizard

    @4 - I also don't understand why experts keep so saying that this will play havoc with future restructurings. It won't. Collective action cluases have put paid to this bgeing an issue. This will only play havoc with Argentina's restructuring and open her up to endless litigation. Given that economic strife in Argentina is the general status quo and that they have, to an extent, shut themselves off, this will only really impact the other countires who have signed up to be part of the bolivarian paradise.

    Jun 06th, 2014 - 10:08 am - Link - Report abuse 0
  • yankeeboy

    5. It's an Arg talking point. If you read any legal expert opinions they think the same as your post. It is a non-issue for future restructurings.
    Arg signed a bad contract and like the Arrested Development Man Child they are they want a do-over.
    Too bad so sad

    Jun 06th, 2014 - 10:30 am - Link - Report abuse 0
  • Briton

    Would it be fair to say,
    that if one is allowed to get away without paying,
    very soon it will open the floodgates to others who will do the same,
    we reap what we sow..?

    Jun 06th, 2014 - 11:49 am - Link - Report abuse 0
  • golfcronie

    I don't see a problem. If you borrow money you repay it . simple really.They say they have 28 billion in reserves, so what is the problem, just pay.

    Jun 06th, 2014 - 11:52 am - Link - Report abuse 0
  • Conqueror

    @1 - 3 I get “british bomber”. You want to bomb the British. Fortunately, WE can't be bombed. But WE can bomb.
    This situation is simple. Argieland set out to commit a fraud. It's quite obvious. an “honest” state would have sat down with bondholders and negotiated an agreement. Argieland didn't. It went for duress. “Accept this or get nothing”. Criminal. Any other country planning on being as criminal and fraudulent as argieland? Not a concern then, is it? It matters not who owns the bonds now. The original bondholders didn't have the funds to pursue argieland legally. Some “made do”, some sold to hedge funds. And undoubtedly got more than argieland was offering. Current owners are demanding that argieland comply with its commitments, contracts and the applicable law. And who chose the law? And who refuses to comply with it?

    Jun 06th, 2014 - 11:59 am - Link - Report abuse 0
  • La Patria

    @3 If the s**t hits the fan following a default and the peso devalues even more plus possible hyperinflation, using cigarettes as a more stable commodity for bartering / trading for everyday goods is a technique some people have used before in BA. Crazy but true

    Jun 06th, 2014 - 12:00 pm - Link - Report abuse 0
  • british bomber

    @10
    But I'm in England. All that's nothing to do with me.

    Jun 06th, 2014 - 12:30 pm - Link - Report abuse 0
  • AzaUK

    wonder what the US dollar to Argentina Fag packet exchange rate will be, hehehe

    Jun 06th, 2014 - 12:44 pm - Link - Report abuse 0
  • tRoll_with_the_Punches

    Meanwhile in the real world outside theoreticals and courts rooms in NorthAmia:

    http://news.yahoo.com/police-university-student-disarmed-gunman-4-shot-005033224.html

    And pictures that prove USA is booming:

    http://news.yahoo.com/police-university-student-disarmed-gunman-4-shot-005033224.html

    Gosh, with all the people being shot dead all over the place and their cities collapsing in ruins, that country really does look like Somalia or Syria.

    Jun 06th, 2014 - 02:10 pm - Link - Report abuse 0
  • bushpilot

    “Specialists believe Argentina and the hedge funds have a 50/50 chance.”

    This tells me SCOTUS would be split if this case were heard.

    SCOTUS will hear this case if 4 out 9 Justices agree to hear it (Rule of Four).

    Once the Court takes it I think that same pro-Argentina group of 4 Justices will decide in Argentina's favor. And support from one other Justice, probably Kennedy, would make their pro-Argentina opinion a majority.

    It only takes 4 out of 9 Justices to hear it but, this still doesn't happen most of the time.

    http://law.freeadvice.com/litigation/appeals/supreme_court_case_hearing.htm

    If they hear it, I think they will lean towards the “less messy” outcome, in favor of Argentina.

    Jun 06th, 2014 - 02:33 pm - Link - Report abuse 0
  • MagnusMaster

    @8 the problem is that the 28 billion reserves are bogus. They include bonds, assets and most importantly, dollars owned by private individuals deposited in Argentinian banks. BCRA only has about 6 billion in liquid cash, and they admit it themselves, though nobody knows how fudged the numbers are.
    Note that the reserves numbers were always counted in this bogus way since who knows when. While 28 billion sounds like a lot, due to the way it is counted it is actually dangerously low. I think De La Rua had 30 billion when the economy blew up. And back then they didn´t have to import oil.
    Unless the Paris Club goes after CFK´s stolen loot, takes it and pardons our debt (since all the money stolen by CFK was money from the state, so in a way, if they take the loot it is paid) there is no way Argentina´s debt can be paid. Argentina can´t afford to pay the Paris Club, the holdouts, the oil we need and the energy infrastructure we need at the same time, specially taking into account all the ñoquis we need to pay to avoid a civil war.

    Jun 06th, 2014 - 03:28 pm - Link - Report abuse 0
  • Tobers

    I´ve heard more than a couple Argentine opposition economists say that the next year and half will be ropey in Argentina BUT they seem to have confidence that the next government will almost immediately open the doors to foreign investment - there are many investors waiting to invest in Argentina but are just waiting for a change of government.

    @13 Troll you are obsessed with rogue shootings in the US but tell me how the murder rate in Argentina compares with the US.

    Jun 06th, 2014 - 03:35 pm - Link - Report abuse 0
  • ElaineB

    @16 I don't think it will be quite that easy for Argentina but I do think CFKs negative reputation will repel foreign investment until she goes. She is so good at playing to her poor voters that she seems not to understand that everyone else can hear her.

    Jun 06th, 2014 - 04:45 pm - Link - Report abuse 0
  • yankeeboy

    Funny you keep brining up Detroit. It's the city in the USA that's most like Buenos Aires. Run by liberals for 50 years and now its destroyed.
    The difference is well fix it soon and you'll be even worse.

    Jun 06th, 2014 - 04:52 pm - Link - Report abuse 0
  • ElaineB

    OT but good to see the IMF praising the UK economic plan and admitting they were wrong to criticise it as it has worked a treat.

    Jun 06th, 2014 - 05:43 pm - Link - Report abuse 0
  • Vestige

    50 years is also the amount of time it will take the cayman islands registered nml to recoup the price they paid for the defaulted bonds.

    Thats if the ruling even favors them.

    Jun 06th, 2014 - 06:01 pm - Link - Report abuse 0
  • ChrisR

    @ 20 No Vestige of life in the brain

    Been having another drinking session again and seen the future in your vomit?

    Or can you provide a link to justify that claim?

    Ha, ha, ha.

    You haven’t even seen the other opportunities for NML when the judgement rules in their favour as it clearly should: it’s a contract law thing, that’s all.

    Jun 06th, 2014 - 06:34 pm - Link - Report abuse 0
  • Holdout.from.Germany

    The argument:->
    “If the U.S. courts uphold the Holdout’s position, as negative consequences , Sovereign debt restructurings will be much more difficult and expensive in the future.”
    Answer:
    It is NOT TRUE because, after Argentina’s 2001 Default all bonds imply the Collective Action Clause (CAC) A collective Action clause (CAC) allows a supermajority of bondholders (75%) to agree to a debt restructuring that is legally binding on all holders of the bond, including those who vote against the restructuring.

    BUT, This CAC is NOT implied in Argentina’s repudiated old bonds!
    Accordingly, Argentina MUST fulfill the bond contracts and repay the debt to the holdouts!
    In the “Pari Passu” issue the Holdouts are 100% right! There is nothing to discuss. In the bond contracts “Pari Passu” is clear defined. It would be helpful, if the US Supreme Court rejected Argentina’s unjustified appeal.

    Then, Argentina and the Holdouts could immediately negotiate an
    acceptable solution!
    AND also Judge Griesa invites Argentina to negotiate a solution with the Holdouts.
    President Kirchner (by the way a beautiful woman) should end this since 2002 ongoing HORROR-Default and solve the holdout problem NOW!

    If Argentina and the holdouts made NOW A BINDING AGREEMENT with respect to the “time after” (end of the “Rights Upon Future Offers (RUFO) clause in December 2014), seizure risks and a technical Default would be immediately averted. Argentina could immediately return to the capital market and thus Argentina could refinance the payments to the holdouts, without using reserves.
    Following conditions might be acceptable for the Holdouts and
    may be also for Argentina:
    Argentina makes a buyback offer of about 130-140% for the holdouts ( for owing capital+ accrued interest between 2002-2015).
    (Argentina owes to today about 230%, a cash buyback of 130-140% would so mean for Argentina already a debt relief of about 100%)

    Jun 06th, 2014 - 06:43 pm - Link - Report abuse 0
  • La Patria

    @11 apologies then, thought you were in BA from your post in 1

    Jun 06th, 2014 - 07:43 pm - Link - Report abuse 0
  • Vestige

    21 - ok Chris where you gonna get the money.

    we're only talking in terms of 'billions'.

    Jun 06th, 2014 - 09:05 pm - Link - Report abuse 0
  • ChrisR

    @ 24 Vestige of a glimmer of hope?

    When NML win (and they should) AND The Dark Country pay up (which they may not) then NML will have a viable set of bonds on their hands.

    They could then SELL them to other investors who would never have taken the chances that NML have done, but are “more adventurous” (or stupid) than others and are willing to take the risk.

    It will of course bring down TDC if they default again AND put the lie to “all the reserves” that they may (or in my judgement) they don’t have.

    Weren’t they supposed to have US$ 38 Bn, AND then they ran out of greenbacks! I suppose the other “money” was in the form of IOU’s from the Central Bank and worth even less than the current arsewipes, in other words worthless!

    SCOTUS could bend to political pressure (if in fact it exists) but the disgrace that would bring internationally would be immense and I just do not see it happening.

    Jun 06th, 2014 - 09:28 pm - Link - Report abuse 0
  • Vestige

    So these viable bonds.
    Are they the same easily recognized ones Argentina has sworn to never pay.

    They'll sell like hot cakes.
    Maybe NML can grab a satellite or ship.

    Mission 0.01% complete if they do.
    Time taken : a mere 10 years+

    Jun 06th, 2014 - 09:41 pm - Link - Report abuse 0
  • tRoll_with_the_Punches

    @22

    Keep waiting Germ, Argentina ain't paying rich morons like German and Italian grannies so they can take yet another cruise to Antarctica.

    Jun 06th, 2014 - 10:20 pm - Link - Report abuse 0
  • CabezaDura2

    The gov’t has the water up to its neck with SCOTUS and the holdouts. The Paris Smokescreen was just made to show the judges in the US, that they are paying.
    They don’t want to pay the political cost of default.

    There was no agreement in Paris, explained by Lopez Murphy
    http://economiaparatodos.net/si-no-consiguen-financiamiento-el-segundo-semestre-es-muy-complicado/

    Jun 06th, 2014 - 10:27 pm - Link - Report abuse 0
  • tRoll_with_the_Punches

    @28

    And what happens if there is a default?

    NOTHING.

    Argentina does not tap international markets, so the point is moot.

    Jun 06th, 2014 - 10:29 pm - Link - Report abuse 0
  • CabezaDura2

    3 minutes difference, so you haven’t listened to the former economy minister and Cachanosky and you reply to my comment...

    Why don’t you learn something for a change??

    Jun 06th, 2014 - 10:34 pm - Link - Report abuse 0
  • tRoll_with_the_Punches

    It is all a lie, that's why. The banks want to regain control of Argentina, to subjugate the country once more. So what otherwise, they (the gov) will need to cut superfluous spending of which there is plenty of. Is that such a bad thing?

    Jun 06th, 2014 - 10:37 pm - Link - Report abuse 0
  • CabezaDura2

    I don’t understand you point.
    Are you implying that if there is no cut back these banksters will not come over to take over the country in your false dichotomy world ??

    Jun 06th, 2014 - 10:43 pm - Link - Report abuse 0
  • tRoll_with_the_Punches

    If there is one thing banks still do not have, it is an army. It's getting there as EUialand and NorthAmia morph from democracy to investment banker/anti-terrorism totalitarian tyrannies, but not quite yet.

    Jun 06th, 2014 - 10:49 pm - Link - Report abuse 0
  • CabezaDura2

    I don’t know that will be their problem in any case, my concern is inflation due to outrageous public spending fueled by monetary emission.
    I agree that Argentina doesn’t need to go to the international credit markets, it simply needs to do things relatively right in order to allow investments to flow in

    I want the country to default and not be able to pay for fuel forcing CFK do demit.

    Jun 06th, 2014 - 10:55 pm - Link - Report abuse 0
  • tRoll_with_the_Punches

    There won't be any investment if CFK demits. President not finishing their terms are not a good signal.

    You know my position on foreigners and their “investments” (the only thing foreigners did in the 90s is BUY our companies at pennies their value, to then ship them to Brazil, Mexico, and China... not one penny was invested in Argentina in genuine production), so I won't rehash that story with you.

    Jun 06th, 2014 - 11:02 pm - Link - Report abuse 0
  • british bomber

    @20
    Its worse than that. They will never get the money. The problem is that the Argues may not pay the 93% because of the actions of one Wall St banker.

    Jun 07th, 2014 - 02:42 am - Link - Report abuse 0
  • tRoll_with_the_Punches

    @36

    Sounds very Wall Street to me. All or nothing.

    Problem is they only want all or nothing when it works for them.

    As I say Europeans and North Americans, and Australians, and quite frankly increasingly Asians and Latin Americans (those that are adopting capitalism) are true FOOLS.

    The capitalist mantra?

    Privatize the profits, socialize the losses.

    Only fools would be willing participants in such a system.

    Jun 07th, 2014 - 02:46 am - Link - Report abuse 0
  • Conqueror

    The ONLY real answer is for argieland to pay EVERYTHING it owes. And if argies starve to death, who cares? Nobody will be complaining as CFK and all her criminal cronies will be swinging from lamp posts on butchers' hooks and piano wire. Surrounded by gibbet cages so that bits don't drop on the ground. Something to make part of the educational system. “This is what happens to you if you're not honest”. Important that the malefactors stomachs should be slit open so they have to hang holding their entrails until they die. Then to be coated in pitch and set alight. Or perhaps they could be coated and set alight a couple of hours before death. “Citizens” to be forced out to watch. Controlled by the Falkland Islands Defence Force. Rules of engagement? On any sign of unrest, shoot to kill. Backed up by the British armed forces. Who still remember the 255 they left behind!

    @35 Who'd invest in argieland? Britain built it, argies destroyed it. A matter of entitlement. What WE built, WE can destroy. That's OUR right!

    Jun 07th, 2014 - 10:38 am - Link - Report abuse 0
  • golfcronie

    @37
    No getting away from the fact. Argentina borrowed money in the markets and spent it, if you borrow money the idea is you pay it back, no getting away with it. If you didn't want the money why ask for it? You try getting money in a civilised country and then say you can't pay it back, the bailiffs would be round your house with a court order and reposses anything of value. Thats the trouble with living in a third world country no ethics.

    Jun 07th, 2014 - 02:17 pm - Link - Report abuse 0
  • Monkeymagic

    @39

    you misunderstand our Latin friends.

    In our society, if you borrow money, it is seen as honourable to try as hard as you can to pay it back on the terms you agreed. It is seen as a sign of strength if you meet your commitments and only “default” in the direst of circumstances.

    These behaviours are sadly rarer and rarer, but generally the consensus would support it.

    In Argentina, it is completely and entirely the opposite. If someone lends you money, they are weak. If they lend you money, the onus is on them to have to get even the original loan back. It is a sign of strength and character if you avoid paying it back, if you can lie, cheat and steal your way to avoiding repayment.

    So, when Argentina was borrowing all the money, it knew full well it had no intention of repaying it. When Argentina was watching Repsol invest, it knew full well it planned to seize the assets.

    By our standards Argentines are lying, thieving, immoral and unethical. By their standards these are characteristics to be admired.

    You only have to read the posts of Marcos, Dany, Paul and the other cretins to see this...it's not their fault...hahaha

    Jun 07th, 2014 - 05:46 pm - Link - Report abuse 0
  • Briton

    We could always send the bailiffs in.

    Jun 07th, 2014 - 06:40 pm - Link - Report abuse 0
  • Holdout.from.Germany

    Argentina’s nightmare default, this since 2002 ongoing HORROR must finally have an end!!!

    We, the holdouts, have been suffering for more than a decade!!

    Since 2002, Argentina has not paid a cent to the holdouts!

    President Kirchner (by the way a beautiful woman) should end this since 2002 ongoing HORROR-Default and solve the holdout problem NOW!

    In the “Pari Passu” issue the Holdouts are 100% right! There is nothing to discuss. In the bond contracts “Pari Passu” is clear defined. Also, in the bond contracts Argentina has explicitly waived its sovereign immunity.
    It would be helpful, if the US Supreme Court promptly rejected Argentina’s unjustified appeal.

    Then, Argentina and the Holdouts could immediately negotiate an
    acceptable solution!
    AND also Judge Griesa invites Argentina to negotiate a solution with the Holdouts.

    Following simple conditions might be acceptable for the Holdouts and
    probably also for Argentina.

    Argentina (or investment banks, funds) make a buyback offer of about
    130-140% for the holdouts ( for owing capital+ accrued interest between 2002-2015).

    (Argentina owes to today about 230%, a cash buyback of 130-140% would so mean for Argentina already a debt relief of about 100%)

    Jun 07th, 2014 - 07:27 pm - Link - Report abuse 0
  • ChrisR

    @ 42 Holdout.from.Germany

    You were doing fine until the last number!

    The real saving (if 230% is correct) is:
    230 - 140/230 = 39.1% (of the final 230%)

    :o)

    Jun 07th, 2014 - 10:31 pm - Link - Report abuse 0
  • Briton

    President Cristina Fernandez praised the recent support for Argentina

    As long as she has the support of the whole world, she will never pay her [your] debts,
    after all it all the fault of others and not Argentina,
    so she says...lolol

    Jun 08th, 2014 - 09:30 am - Link - Report abuse 0
  • Holdout.from.Germany

    @ ChrisR

    Argentina (or investment banks, funds) make a buyback offer of about
    130-140% for the holdouts ( for owing capital+ accrued interest between 2002-2015).

    (Argentina owes to today about 230%, a cash buyback of 130-140% would so mean for Argentina already a debt relief of about 100%)

    So Argentina owes today appr. 240% (incl. accrued interests between 2002-2014)
    If Argentina makes a buyback offer of 140%, than it has a debt Relief of about 100%. (240-140=100%) Example in us Dollar/euro. Argentina owes to each 1000 us$/euro today 2400 us$/euro
    If Argentina repays 1400$/euro than, it has a debt releif of 1000$/euro. That means 100%.

    Jun 08th, 2014 - 03:33 pm - Link - Report abuse 0
  • ChrisR

    @ 45 Holdout.from.Germany

    The DEBT is what they owe, which is the original price and all the interest.

    If you had loaned someone money I am confident YOU would want what was OWED.

    In which case if they have a relief of 100% they would owe nothing. You cannot have 100%relief and still owe money.

    If you dont believe me try your little dodge on HMRC and see what happens next.

    Jun 08th, 2014 - 06:18 pm - Link - Report abuse 0
  • TomKey

    @29, As much as you say you hate anything that is not Argentine, and that you need nothing from outside of your borders, then why in your Oilfields is it not 100% Argentinian businesses, why is Halliburton, National Oilwell Varco, Baker Hughes, Mi SWACO, H&P, Neighbors, QMax, I can go on and on, no country is an island. So as much as you hate it, you cannot bury your head in the sand and pretend.

    Jun 09th, 2014 - 02:06 am - Link - Report abuse 0

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