United StatesUnited States
By Eileen Appelbaum (The New York Times) - There is no way to construe as fair the United States court ruling that Argentina cannot pay 93% of its creditors, unless it first pays a small group of hedge funds. It's not fair to the 93% of bondholders who negotiated a restructuring of Argentina’s debt in 2005 and 2010 with reduced payments.
The following article by Peter Eavis and Alexandra Stevenson was published in The New York Times and addresses the current litigation between Argentina and the speculative funds. The hedge fund firm of billionaire Paul E. Singer has about 300 employees, yet it has managed to force Argentina, a nation of 41 million people, into a position where it now has to contemplate a humbling surrender.
The following piece published in The New York Times was written by Joseph E. Stiglitz, winner of the Nobel Prize in Economics and a former chief economist of the World Bank, and currently a professor at Columbia University.
The International Swaps and Derivatives Association (ISDA) on Friday declared Argentina in default, which could trigger payments worth up to one billion dollars on credit default swaps.
The Argentine Economy Ministry claimed on Friday New York judge Thomas Griesa has benefited “vulture funds” during negotiations over Argentina's defaulted debt with holdouts and asked the (Argentine) National Values Commission (CNV) to start an investigation over alleged “speculative moves”.
The U.S. economy added 209,000 jobs in July, the Labor Department reported on Friday. However the unemployment rate edged up to 6.2% from 6.1%, somehow confirming the Federal Reserve concern about still weak employment.
US District Judge Thomas Griesa presiding over Argentina's bitter dispute with two hedge funds left the country stranded in default on Friday, ordering it to hold new negotiations and calling for an end to mistrust. In a stern tone Griesa slammed the decision by Argentina to defy his order that it pay in full holdout investors and instead opted to default on 29 billion dollars in debt.
Kevin Sullivan, US interim ambassador in Argentina affirmed on Thursday that the country must seek “practical solutions” with the 'holdouts' or the so called vulture funds over defaulted bonds.
Over 100 economists, including Nobel laureate Robert Solow, Branko Milanovic and Dani Rodrik called on the United States Congress to take action to mitigate the harmful fallout from the recent ruling by Judge Griesa of the U.S. District Court for the Southern District of New York that requires Argentina to pay holdout creditors at the same time as the majority of creditors.
President Cristina Fernández said on Thursday she will not sign an agreement that compromises Argentina's future, while blasting vulture funds for wanting to collect Griesa's usurious sentence, following the Wednesday failure of negotiations between the country and holdouts.