MercoPress. South Atlantic News Agency
Country and organizations support for Argentina's litigation with hedge funds increases
Argentina underlined the support from Brazil, France, Mexico, (even the IMF), among other institutions in the country's long exhausting litigation with hedge funds, an issue which is “crucial for Argentina and the whole international financial system”. Read full article
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Disclaimer & comment rules“predatory conducts against vulnerable populations” - I hope they also take that to refer to the countries' own governments, which are the main predators who ransack the countries' resources to fill their own family coffers. The Kirchners are a prime example!
Mar 26th, 2014 - 05:50 am - Link - Report abuse 0Argentina underlined its desperation to get ANY support from ANYONE - should be the opening statement of this piece, surely?
Mar 26th, 2014 - 08:13 am - Link - Report abuse 0If Argentina wins the court battle with the hedge funds does that not send a message to other countries that if they default they can negotiate better terms. Surely, if you borrow money the understanding is that you pay it back with interest. Who in their right minds would lend money for no return.
Mar 26th, 2014 - 08:49 am - Link - Report abuse 0Commercial bankruptcies are a reality of business/life.
Mar 26th, 2014 - 11:21 am - Link - Report abuse 0Investors get hurt.
In this case it was a national bankruptcy.
Risk and reward.
0% risk and 100% reward ... nope.
So the US is going to set a precedent which compromises an EU block country after direct appeals from France.
So hugely damaging not only relations but US/EU trade itself, trade which dwarfs NML by many factors.
Argentina/Mercosur future trade relations too ... where the worlds largest lithium deposits ... which may soon be needed just a wee bit ... are found.
Friendly, strategic, South American countries are also appreciated these days.
All for the sake of private holdouts worth a mere pittance in the overall picture.
Vestige, You clearly have no idea what you are talking about. SCOTUS is not going to weigh USA/EU relations in this case as it has nothing to do with the LAW.
Mar 26th, 2014 - 11:51 am - Link - Report abuse 0Nobody cares if Argentina fails. In fact I think lots of people want it to fail, spectacularly.
Argentina has no friends, they have burned all the bridges they could find and there is nowhere to retreat.
There's not one person predicting Argentina will win at SCOTUS.
My guess is this will drive the Sovereign Bankruptcy Court the IMF wants to get started after the other scofflaw nations see the ruin Argentina has put themselves into.
The important thing to note here is argieland's attempt to promote criminality as the saviour of the world's economy. It's not hard to see. In the case of a bond default, the bond issuer is supposed to negotiate with the bondholders to agree a viable and acceptable solution. Argieland didn't do that. Knowing its own intention to default, argieland targeted its bonds at small investors. Then, when it defaulted, it told the bondholders that they could either accept a 70-75% “haircut” or get nothing. And who amongst the small bondholders had the money to fight? Unfortunately for argieland, it forgot to consider hedge funds. Companies with the financial clout to take on a country. And so argieland has spent millions in trying to cover up and justify its fraud.
Mar 26th, 2014 - 12:02 pm - Link - Report abuse 0But let's look at the reality. How will a judgement to force argieland to pay its debts be detrimental for countries that deal with their investors honestly? All it will do is to ensure that default agreements can be subject to scrutiny by courts. What's wrong with that? Aren't courts supposed to deal in justice? If argieland's “activities” were designed to deprive investors on the returns from US$80 billion, what's wrong with correcting the situation and throwing the perpetrators in prison? That's civilised. Let's look at in real British terms. Someone comes along and asks to borrow £100. You lend it. A while later, he/she/it comes along and says they can pay you £20 in settlement. You don't get a choice. It's £20 or nothing. But you were expecting to make £90 profit. When you check on your borrower, he/she/it is spending loads of money. Does it seem to you that you've been ripped off? Does it seem to you that your “borrower” is actually a fraudster?
I wonder where US/EU trade is affected by a criminal latam country? And argieland/mercosur future trade relations? Who gives a toss? Criminals must be punished. And if we can get two in one, so much the better!
Oh yes absolutely, Argentina conspired to default itself. yep.
Mar 26th, 2014 - 01:41 pm - Link - Report abuse 0Yankee - would you consider that there might be an actual coinciding reason that France would be filing the amicus and that an article mentioning Greece and huge shockwaves might have something to do with it.
Laws change ... especially in the face of international relations and lots of money. Would politicians....very high level in this case... puppeting a judge be that unusual, didn't Obamas administration even give a wink...oh and then retract it. 'we take that back - totally didn't mean it'
I know for certain the IMF “remains deeply concerned about the broad systemic implications”.
No Yankee I dont think you'll be seeing what you are waiting for, you should have taken the offer, rather than come on here complaining. Sorry for your personal loses.
Also, should the case even go against Arg, the US govt creditors will get first pickings and Im sure in the interests of keeping all American continent trade and world trade itself stable that this first priority tranche will be payed out under agreed terms over a looooooong loooooong time. (try seizing assets when the govt are first in line) Then will come other govt creditors and finally in the year 2100 Singer might receive his hologram cheque by moonpost.
She don’t like double standards,
Mar 26th, 2014 - 01:46 pm - Link - Report abuse 0Yet if she can afford 2nd hand ships, planes, and, err, soldiers and swanning about all over Europe,
The she can pay her debts, can she not..
.
Not necessarily.
Mar 26th, 2014 - 01:57 pm - Link - Report abuse 0UK the IMF in at one stage, while still splashing the cash.
WW1 debts weren't ever paid off either, yet the England still had all lifes little luxuries.
ww2 debt ... yeah eventually....naturally there was an understanding that those payments dont get made overnight and theres no advantage to having another broke country in the world.
Money of this size doesn't get dealt with in a quick lump sum, rather in many decades.
Seychelles?restructuring foreign debt?
Mar 26th, 2014 - 02:00 pm - Link - Report abuse 0Well they could start by freezing all foreign assets and deposits of doubtful origin.
cFKs for a start?
7. That post makes no sense at all. This case has nothing to do with intergovernmental loans. It is simple NY contract law that any sensible entity would have negotiated and settled long long ago.
Mar 26th, 2014 - 02:28 pm - Link - Report abuse 0It is very obvious that you have absolutely no idea what you are talking about.
Well, admittedly Ive not much knowledge of it.
Mar 26th, 2014 - 03:26 pm - Link - Report abuse 0However, Im willing to bet that your knowledge is not only highly biased and filled with emotion and wishful thinking and disappointment, but that its also quite flawed.
I doubt that NY state clearing the way for any international enforcing alone/speaking for the whole country, and Id bet that anything of this geo-political nature will ultimately be managed at a federal governmental level.
I think you... or rather 'pa-pa' ..... lost money in Argentina and you've been butthurt ever since.
Risk and reward, good luck getting it back, you'll need it.
Seize the Libertad (without getting shot in the face this time) - that'll get you a few hundred thousand.
I would never invest in Argentina. It is a worthless country filled with criminals. They will get never their house in order until they get rid of all of the Peronistas. I don't see that happening in my lifetime.
Mar 26th, 2014 - 03:38 pm - Link - Report abuse 0Argentina will continue down the path of getting poorer and dumber with every generation.
You clearly have no idea how things work in the USA.
My posts speak for themselves, I am more often right than wrong.
and we shall both see shortly.
Took over 50 years for N.S.W. to conclude payment for the Sydney Harbour Bridge ( A$ 500 million in today's money ).
Mar 26th, 2014 - 03:43 pm - Link - Report abuse 0I dunno about the shortly thing.
Mar 26th, 2014 - 04:09 pm - Link - Report abuse 0But I do read about this 'lock law' thing which will kick in on 01/01/2015.
Maybe another 0.005% will be offered just to make them shut up.
Id take it.
15. I'll pass your learned advice onto Mr Singer.
Mar 26th, 2014 - 04:58 pm - Link - Report abuse 0boob
thats ok I have him on speed dial.
Mar 26th, 2014 - 08:36 pm - Link - Report abuse 0as I though...cat playing with a filthy rat
Mar 26th, 2014 - 09:03 pm - Link - Report abuse 0It’s difficult to determine if activist hedge fund titan Paul Singer of Elliott Management has a smile on his face as he toys with the nation of Argentina, but his recent lawsuit against the nation’s aerospace plans have those in the hedge fund world snickering.
18 -
Mar 26th, 2014 - 09:44 pm - Link - Report abuse 0Washington post ?
International herald tribune ?
NyTimes ?
Guardian ?
Reuters ?
Huffpost ?
FT ?
Paul the snake Singer took a risk buying those bonds. That despicable old man needs to learn that not every investment is a winner.
Mar 26th, 2014 - 10:19 pm - Link - Report abuse 0What happens when the interest builds so much after dragging on, that there is no way a country can pay that?
If anyone is to blame, it is the original investment advises that directed people to buy those bonds in 2001.
20. Argentina shouldn't have borrowed the money if they can't pay it back.
Mar 27th, 2014 - 01:45 pm - Link - Report abuse 0There is something seriously wrong with the psyche of your country that you try to push off blame on anyone but yourselves.
Singer is brilliant and the Kirchners are stupid filthy corrupt thugs. They should be in jail or hanging from a lightpost for the misery they are bringing onto the country and all the U$ they've stolen.
21 - oh no, you must have been quoting an article in 'the value times.com'.
Mar 27th, 2014 - 03:22 pm - Link - Report abuse 0World leader in journalism that it is.
(even if I myself could write their html....looks like its written on microsoft notepad)
@6
Mar 27th, 2014 - 04:47 pm - Link - Report abuse 0Isn't that what happens all the time now in private British and American corporations though? Millions of people around the world invested in the 2000s in US and UK companies, only for their stock to collapse to cents, get nothing in return, and see the CEOs of those companies living in amazing wealth thanks to their retirement packages.
I honestly don't understand why people in those countries find that acceptable, but oh well its your countries.
As for Argentina, perhaps Argentina should have negotiated with the bondhonders. The original ones. The “hedge funds” lets remember, purchased the distressed debt at cents to the peso, so the “bondholders” were already screwed even before the current litigation.
Will Singer distribute the winnings fo a hypothetical victory amongst all the former holders of argie debt that sold it in panic to his fund back in 2001-2002?
Somehow I think not.
It would be nice if the same morality of standards was applied to both corporations and countries. But left-wingers want one standard for themselves and another for the “evil corporations”, and the pro-business people believe they should act solely for good of the business, but that employees and nations should act “morally” and not for their own financial interests.
Both are absurd and that is why world economics has gone haywire last 20-30 years.
23. Maybe you should learn the difference between bonds and stock. You have a really terrible education.
Mar 27th, 2014 - 05:33 pm - Link - Report abuse 0”Chapter 11 bankruptcy is more widespread, as well as being costly and complex. In a nutshell, Chapter 11 bankruptcy allows the business to continue operating shielded from recovery actions from its creditors. All major business decisions must however obtain approval from the bankruptcy court. The company is reorganized in order to return to profit and normalcy in operations.
Mar 27th, 2014 - 05:43 pm - Link - Report abuse 0The debt must, almost inevitably, be restructured.****Both the Chapter 7 and Chapter 11 bankruptcy are likely to leave corporate bondholders with some loss.**** Under Chapter 11, corporate bondholders no longer receive principal and interest payments just like the shareholders will no longer receive a divided.
As soon as the reorganization plan has been agreed upon by the company’s management, it is made known to creditors including bondholders. The plan outlines the creditor’s rights, and what they can expect to get once the reorganization is complete. Bondholders may be issued with new stock or a combination of stocks and bonds in the restructured corporation in exchange for their bonds. ****The new securities are often fewer and are of lower value than the defaulted bond.****
http://www.learnbonds.com/bond-default/
So I ask again, why do pro-business people find it reasonable for a bankrupted company to be able to write-off principal from pre-bankruptcy bonds, but not afford the same rights to a country in bankruptcy.
25. There is no bankruptcy court for countries.
Mar 27th, 2014 - 07:34 pm - Link - Report abuse 0Then how can you demand a process when there is no structure to handle it?
Mar 27th, 2014 - 08:19 pm - Link - Report abuse 0If there is no court, it would seem to me the only solution would be for the two sides to settle it out however they can. That usually does not end up well, as one side is almost always stronger than the other.
That is the concept behind courts (even though nowadays there is no justice system in the world that is truly fair), to equalize all factors ranging from social, economic, political, or popularity status and provide an environment where the weaker stands equal with the stronger.
Absent of that, then it is a free for all, which is what we are seeing here.
Doesn't matter - Politicians write the laws. He who pays the judge.
Mar 27th, 2014 - 08:26 pm - Link - Report abuse 0Ask yourself how many times the big corporations have been let off the hook, bailed out, or shielded.
The people who own the global chess board dont want pieces of their game moved by uppity kids.
I hear corporations can even be considered as being people these days - lolol.
Ah corporate personhood. A nice little example of how things work out in real world law where theres enough power and money involved.
Value to US of a happy Argentina > Value to US of a happy Cayman islands hedge-fund.
Negative value to the US of an unhappy Argentina > Negative value to US of an unhappy Cayman islands hedge-fund.
WMD's.
27. Up until Nestor blew up the normal rules for negotiating with a country's bondholders the system for the most part functioned pretty well. It has only been since Argentina refused to pay, forced a haircut and ignored the courts that this has even become an issue.
Mar 28th, 2014 - 11:11 am - Link - Report abuse 0You are under the mistaken belief that Argentina is a special case. It is not.
In the end the contract was signed and will be fulfilled.
Just watch.
What was the system that Nestor blew up? Can you please elucidate it.
Mar 28th, 2014 - 03:38 pm - Link - Report abuse 0The only system prior to that which I recall was IMF intervention, bailout, and the like. That was the vogue in the 1990s and 2000s.
Starting with the United Kingdom (the irony) in the 1970s, and the a rash of IMF interventions in Mexico, Thailand, South Korea, Hong Kong, Philiphines, Thailand, Indonesia, Russia, Brazil, Turkey, etc, etc in the 1990s and early 200os.
Those countries accepted emergency funds from the IMF in exchange for reforms.
Without those, all those nations would have defaulted, wouldn't you agree? South Korea, which everyone praises, was this close to bankruptcy in 1997.
http://www.asianinfo.org/asianinfo/korea/eco/economic_crisis_of_1997.htm
I have read on the Asian and Russian / Eastern Europe financial crisis of the time, all the countries I mentioned had their reserves GONE. It's hard to imagine now because all those countries have such healthy reserves or economies now, but 15 years ago they stood on the brink of collapse.
So did the USA in 2008, it was very close to a full-fledged bankruptcy and you know it. Luckily it was able to secure itself a bail-out through massive raising of debt levels.
The difference is, Argentina was not offered a bailout, it was the only country that was refused. The IMF said no, Bush at the time said no, the EU said no.
30. Your revisionist history is not very entertaining.
Mar 28th, 2014 - 07:05 pm - Link - Report abuse 0Argentina was never denied a loan from the IMF. Nestor paid them off out of reserves and told them not to come back. You and a couple other scofflaw deadbeat countries are the only ones who've not had an IMF audit in many years.
I hope you don't need an IMF bailout now because you are out of status and they couldn't loan to you even if you begged.
That list of all the bailed out countries that are now doing well were managed out of their crisis by the USA/IMF. It is obvious that Argentina should have actually done what the IMF requested in the 90s and you probably wouldn't have had the crisis in 2001 and the one that is just about to come.
The USA was never near bankruptcy that is a Rg wet dream. It is practically impossible to default when your debt is denominated in your own currency.
This is a story of Wall Street trying to steal from Main Street. Paul Singer snd NML are trying to steel the bondholders' money. This must not stand! NML must lose.
Apr 01st, 2014 - 11:32 am - Link - Report abuse 0Commenting for this story is now closed.
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