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As the US before IMF lines up behind Argentina in the litigation with hedge funds

Friday, May 24th 2013 - 07:10 UTC
Full article 34 comments

For the first time since the litigation of hedge funds against Argentina the International Monetary Fund warned about the ‘risks’ which would entail ratifying Judge Thomas Griesa ruling condemning Argentina to pay over a billion dollars plus interests to the so called ‘vulture funds’. Read full article


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  • Redrow

    An interesting test for the independence of the judiciary. Do you apply the law, or make judgements based on political expediency? I hope it's the former regardless of whether they find for or against Argentina.

    May 24th, 2013 - 07:49 am - Link - Report abuse 0
  • Biguggy

    A very good point.

    May 24th, 2013 - 09:18 am - Link - Report abuse 0
  • Captain Poppy

    There is a very good possibility that Argentina can once again squeak by. Our law here is not codified without exception. If someone is arrested for stealing from a grocery store, they may not feel the full effects of the law when circumstances are accounted for. Let's say for argument purposes....the man lost his job, his home.....and was stealing to feed his family. So if one does this, that is your sentence does not always apply. That is not to say I support Argentina with getting off, I want to see them hang. There is always the possibility that the court can rule against Argentina and qualify their opinion on the premise that because the defendant is a sovereign state, this matter is applicable to and only to this case and similar matters must be handled on a case by case basis.
    Personally I do not agree with the premise of the way funds operate like MNL, basically buying bankrupt countries bonds for pennies on a dollar and enforcing collection of the full amount. However, that being said it is not illegal so until the practice is modified I cannot lobby against it. Perhaps the time has come to develop an international process to allow countries to formally go bankrupt, like individuals, but not retro-actively.

    May 24th, 2013 - 10:25 am - Link - Report abuse 0
  • ChrisR

    What Captain Poppy says is already the case in practice with regards to poor countries bonds is in recent years.

    However, to let any entity off high value sovereign debt is to encourage the rogue states such as Argentina who never have any intention of paying their debts to get off scott free. Remember that once The Dark Country had rammed the discount through (accepted mainly by banks who passed it on to their customers - they themselves never paid it) then everybody else, particularly the small investors who had no clout were told to fcuk off. This is clearly wrong and should not result in the change that is being sought otherwise other countries will take advantage of it and it will end up that no country pays it’s debts.

    This has been fully explained in the specialist debt press many times in the last few months because of Argentina.

    May 24th, 2013 - 12:00 pm - Link - Report abuse 0
  • Captain Poppy

    I want to clarify that I do not mean to suggest thjat they get off scott free. We have a chapter 11 in the USA and they go into recievership and develope a debt repayment plan over a period of x years that is namaged by a trustee until the plan ihas been fulfilled. Something along these lines for hard strapped countries that have tried and then total debt forgiveness for smaller underdeveloped nations with an oversight plan. However countries with the intent to defraud would not be eligible ad they would need to fend for themselves in courts of the countries where the debt was taken out. All countries that signed unto a treaty allowing soveriegn bankruptcies would also agree to abide by the countries rulings for countries that attempted to defraud.

    May 24th, 2013 - 12:25 pm - Link - Report abuse 0
  • yankeeboy

    It is simple contract law. The only reason this is getting any news it because it is a country, they have deep pockets and can afford the almost endless litigation expenses.
    Argentina will lose and whether they pay or not is up to them.
    My guess is that this won't get paid until a new Gov't takes over no matter how much it hurts the population.

    May 24th, 2013 - 12:36 pm - Link - Report abuse 0
  • Conqueror

    @1 I agree completely. In my opinion, argieland never intended to repay its debt. During research, I found one comment significant. “No big Latin American government has ever fully repaid a 30-year bond”. Unfortunately, it seems that investors have short memories. It's a pity that they didn't recall that argieland, as of 2005, had defaulted on its foreign debts no less than five times in 175 years. That takes them back to 1830! By no means a good track record either for debt management or honesty. It would be akin to approaching one's bank for a loan in order to make debts more manageable, and then promptly going out and buying a brand-new, and expensive, car. But, in argieland's case, it stole from ordinary people. Moreover, as I understand it, a debt restructuring is supposed to be a matter for negotiation. Argieland didn't negotiate. It imposed. And those factors are why I believe argieland must be made to pay. It is unacceptable for a state to use its position to steal from ordinary people. There is also the fact that it was so blatant. This is therefore an ideal case to make it clear, even to states, that they are not above the law and they will be brought to justice. If argieland has to suffer, then what about the private investors from Spain, Italy, France, Germany and other countries? NML did no more than to buy bonds from people unable to fight argieland's theft of their money. To my mind, making argieland pay up is natural justice.
    @5 A fine idea. Except that argieland regularly reneges on agreements, ignores the law and tears up treaties or denies that they apply. And what can anyone do about it? I suggest that the only way to make a country like argieland comply would be to go to war. To invade with overwhelming force, remove the “government”, sort the country out, take the amount of the debt and then leave. And that would be the real debt, not the restructured debt.

    May 24th, 2013 - 12:54 pm - Link - Report abuse 0
  • Condorito

    Wasn't there a deadline at the end of April by which time Argentina had to propose how it was going to pay back the hold outs?

    May 24th, 2013 - 01:15 pm - Link - Report abuse 0
  • TroLLey_to_Truth


    What did I say months and months ago?

    AS I SAID MONTHS AGO, If these 5% of “investors” (which were not investors buy opportunists and sharks), win a case like this, then you effectively eliminate RISK from the equation of the investor. The onus in borrowing falls completely upon the borrower, because if he can't pay and defaults, precedent would state that even if he did default he would have to pay everything back.

    Thus, no one in their right mind would negotiate or show any flexibility towards any other country in the future (potentially eventually the USA, UK, EU, JAPAN).

    They would just sit back and wait for a court to rule “you must give all the money back”.

    In short, a ruling against Argentina would eliminate the option of default/bankruptcy, one of the tenants of capitalism.

    Of course, the despicable tossers here don't care about any of that. They just want 'argie' blood.

    May 24th, 2013 - 01:31 pm - Link - Report abuse 0
  • yankeeboy

    Toby, Argentina has lost in every venue. There is no reason for the courts to overturn this judgement.
    Your idiotic Prez will take the country down in flames not to pay this bill. Millions of people will suffer because her her arrogance and stupidity.
    And that makes me happy.

    May 24th, 2013 - 01:56 pm - Link - Report abuse 0
  • TroLLey_to_Truth


    LOL, your words and threats are as empty as your brain.

    To finish my thought...

    As I also said months ago, but no one has the acumen and noetic prowess to formulate, if this precedent became legal plinth, what would then take place is BANKS, HEDGE FUNDS, would COLLUDE to bring the debt of otherwise sound nations to a state of distress, to force them into default and then snap all their bonds back at much higher rates, and force the country to pay back.

    It's been proven financial institution and hedge funds are capable of murder, or anything else to make money.

    A decision against Argentina would in effect eliminate all risk for the lender, he would get paid back, in full, no matter what. And in fact, it would be better for the borrower to do POORLY, because the lender can then resort to USURY to get more return on “investment”.

    At that point you would have to question why then a lending or capital market exists in the first place, since it is based on risk and reward for BOTH sides, not just one. Alter that equation and then borrowing because suicide. No one would borrow and then lenders would begin losing their capital because their money is sitting idle while inflation eats it away.

    Eventually, a liquidity problem arises and then a solvency problem.

    In the end, the entire precious “capitalist” system is basically stultified and then choked to a standstill.


    Back to reality... Argentina will NEVER pay the holdouts. Fact of life.

    May 24th, 2013 - 02:05 pm - Link - Report abuse 0
  • Welsh Wizard

    @9 you fail to understand the value of whole action clauses in current bond docs. In fact, almost every piece written on these fails to relaise that the advent of these clause creates a drag-along right in favour of the borrower. Argentina didn't have one of these. As such, the impact of the ruiling on other countries would be minimal. The reason this is still going itsthat Argentina has consistently told the courts that they have no money and then bragged about how much US$ they have in reserves. For some reason, the courts get pissy when you lie to them.

    May 24th, 2013 - 02:15 pm - Link - Report abuse 0
  • yankeeboy

    Toby, I bow to your legal acumen!
    Seems odd that you are unemployed living in a slum when you could be making a fortune litigating in NYC.

    Bahahaha retard

    Maybe take a read here:
    Argentina is a unique and special case on many levels: the failure of its 2005 and 2010 debt restructurings does not mean that debt restructurings in general don’t work, or that we need to resuscitate the idea of a sovereign bankruptcy regime. Still, the precedent being set here is not a happy one — not for international bondholders, probably not even for Elliott Associates, which is still a long way from getting paid, and definitely not for Argentina. This is looking very much like one of those court cases which absolutely everybody ends up losing.

    May 24th, 2013 - 02:18 pm - Link - Report abuse 0
  • TroLLey_to_Truth

    Of course Argentina has a drag-along, it has been ruled it is unlawful to reach a deal without it. And this is RETROACTIVE.

    That is like saying in individual terms “well, you signed an agreeement where if you don't pay your credit card debt, we take you in as a slave”... even if BOTH sides agree, one the “agreement” becomes litigious legal tenets would immediately declare the “slavery” clause unlawful, no matter if both sides had agreed to it

    That has already been established many times by Argentine assets not being seized in the the USA and Europe, and recently by the UN in the Libertad ship.

    Tough cookie... but you can't single out a country, in this case, Argentina for different and unlawful treatment even if at one point it had agreed.

    I can't agree to slavery for the sake of getting a loan. And the analogy applies for institutions and nations.

    May 24th, 2013 - 02:23 pm - Link - Report abuse 0
  • Welsh Wizard


    It doesn't you twat, otherwise the holdouts would be precluded from litigating. If there was a collective action clause equivalent in the docs they would be bound by majoirty decision. If they disagreed with it then they would be subject to a bond equivalent of a yank the bank clause. Your understanding of bond related legal issues is crap

    May 24th, 2013 - 02:36 pm - Link - Report abuse 0
  • yankeeboy

    Toby, I am curious where did you get your law degree?

    May 24th, 2013 - 02:36 pm - Link - Report abuse 0
  • TroLLey_to_Truth

    Bottom line twats, enough with treating you like rational educated adults when both of you are rebarbative benighted rascals, is that Argentina will never pay:

    1. It wins the legal battles (more than likely)
    2. It loses but still refuses to pay
    3. It loses and is forced to pay, but that causes a default so it cannot pay

    Game Over.

    If I were you yankeeboy, I'd be more worried about other things, like praying you won't find yourself in a free casting for “Splash” while crossing a USA bridge... LOL

    May 24th, 2013 - 02:39 pm - Link - Report abuse 0
  • Welsh Wizard

    @17 - Good, so you have realised that what you were writng above was just BS. Re your points above:

    1. It has lost them so far
    2. Most likley to happen
    3. This shows your grasp of the situation. You cant force them to pay. All you can do is make it as uncomfortable as possible to persuade them to pay.

    Fuck you are stupid at times

    May 24th, 2013 - 02:43 pm - Link - Report abuse 0
  • TroLLey_to_Truth


    No, that assessment is just you on another Opium binge.

    May 24th, 2013 - 02:45 pm - Link - Report abuse 0
  • Welsh Wizard

    Obviously. Probably best to take the advice of the ill-informed over the expert in these situations

    May 24th, 2013 - 02:51 pm - Link - Report abuse 0
  • Brit Bob

    May 24th, 2013 - 03:35 pm - Link - Report abuse 0
  • Think

    The “Market” seems to be lining up behind Argentina(as are the US and the IMF) in their litigation with them “Hedge Funds” (Vultures).......

    May 24th, 2013 - 04:14 pm - Link - Report abuse 0
  • Captain Poppy

    Of course you dumb fuck, they are concerned of losing money. It has nothing to do with supporting Argentina. It took that long to kind whatever you found?

    May 24th, 2013 - 04:27 pm - Link - Report abuse 0
  • Anbar

    “”“A decision against Argentina would in effect eliminate all risk for the lender, he would get paid back, in full, no matter what. ”“”

    unless they had no money to pay it back... oh,... kinda obvious point but you seem to have missed it.

    You also seem to be operating on the premise that countries set out to default and therefore not pay back what they owe. Whilst that may be true for Argentina it isnt true for others.

    Having said that i've said long & hard that the US government would attempt through any and all means to subvert this ruling - and its no wonder the IMF joined in - as this is one of their main methods for the “control” (or imagined control) of other countries “beholden” to them via debt & debt re-structuring.

    “”“”That has already been established many times by Argentine assets not being seized in the the USA and Europe, and recently by the UN in the Libertad ship.“”“”

    No, it hasn't - your above is wishful * entirely invalid.. laughably so. The ship was declared to be outside of what could be seized - no that seizures of other assets could not happen.

    “”Toby, I am curious where did you get your law degree?“””

    It appears he got it from the back of a Kellogg's packet... he is certainly clueless about law.

    May 24th, 2013 - 04:29 pm - Link - Report abuse 0
  • Brit Bob

    May 24th, 2013 - 06:06 pm - Link - Report abuse 0
  • Troy Tempest

    @17Toby Trolls Tragedy

    “If I were you yankeeboy, I'd be more worried about other things, like praying you won't find yourself in a free casting for “Splash” while crossing a USA bridge... LOL”

    You can do better than that - nobody died!!
    You're disappointed, I'll bet.

    What's the matter, not enough porn, you have to troll for human misery and disaster at night to 'get off'?

    May 24th, 2013 - 07:59 pm - Link - Report abuse 0
  • Captain Poppy

    #17 toby to mommas boi. Does it really make you dumber when she pushes you off her teat? You do know that bridge collapsed because of an overloaded truck collided into the structural support. It's not like it was a massive span bridge you twat filler.

    If this was Argentina, there would be no bridge. How many was it that dies all because Argentina fails to install storm drains......50 dead ?

    Get back on your mommas nipple tobi AND momma will both feel better.

    May 24th, 2013 - 08:18 pm - Link - Report abuse 0
  • Biguggy

    Should the details in the link at post #25 be anywhere near accurate it means that Argentina has found a way to avoid, yet again, paying their dues.

    May 24th, 2013 - 08:23 pm - Link - Report abuse 0
  • Chicureo

    Good article from the financial times:

    May 25th, 2013 - 01:25 am - Link - Report abuse 0
  • Terence Hill

    What an interesting conundrum, there have been some good points raised by both pro and con on the issue. I don't have the time or the inclination to try cut this gordian's knot. So I'm going to hazard a guess that public interest will out-weigh individual claims.

    May 25th, 2013 - 01:57 am - Link - Report abuse 0
  • golfcronie

    If you had money, would you lend it to Argentina, don't think so. I think that Argentina ought to set up an Escrow account in all the countries that they do business with. All purchases outside of the country should be paid for in advance or use the Escrow account, it would make Argentina more responsible for its debts.
    Comments anyone?

    May 27th, 2013 - 02:08 pm - Link - Report abuse 0
  • Captain Poppy

    #31 a great idea. In fact something to think of for all countries tht have defaulted like Argentina. Though in practice I don't think that could happen. Bonds and trade are two different beasts.

    Argentina is dead anyway and alive only by association. Brazil and Argentina are in the process of paying the price for allowing Venezuela in Mercosur. It was dying and this only expedited the process. Like pepe said......politics here is more important than the rule of law.

    May 27th, 2013 - 03:24 pm - Link - Report abuse 0
  • Troy Tempest

    Toby Teen Trolley = wikipedo


    May 27th, 2013 - 11:26 pm - Link - Report abuse 0
  • British_Kirchnerist

    I must say, despite their very long and serious history of b*stardy, I've been almost warming to the IMF in recent months - first their request, refused even by the Nich Clegg and the “left” of the Coalition, for the UK to stop the cuts, and now this! Seems they have more understanding of economic reality than the neoliberal fundamentalists and myopic Argie haters on here

    #1 A prime example of myopic anti-Cristina hysteria, you seem to imply that she's running a dictatorship by not immediately implementing an interim ruling of another country's non-federal courts, even when its not in dispute that if she did so it would cause the immediate collapse of her own country's economy!

    #18 Some “supporter of Nestor” you turned out to be! Looks like the mask of concern trolling has slipped...

    Jun 02nd, 2013 - 10:36 pm - Link - Report abuse 0

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