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Argentine bonds' case reaches US Supreme Court; support from Obama administration

Monday, April 21st 2014 - 07:06 UTC
Full article 43 comments

The US government will stand before the Supreme Court on Monday in support of Argentina's position in its ongoing legal fight with bond investors over a ruling which forces banks in New York, with which Argentina does business, to disclose information about the country's non US assets, as investors seek repayment. Read full article

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  • Think

    TWIMC

    Article says...:
    “Argentina has also received the support from Brazil and Mexico who fear the negative consequences for debt restructuring. In the recent IMF-World Bank annual assembly, the G24 also warned about any resolution that promotes the 'predatory behavior' of the bond holdouts and its consequences for sovereign debt. France adopted a similar position, and so did G-77, China plus the IMF and renowned economists such as Joseph Stiglitz and Nouriel Roubini.”

    I say...:
    VULTURES..., we are coming after you...
    As that magnificent Yank (AND citizen of Rapallo;-) once said...:
    “”“I was out of focus, taking a symptom for the cause.... The cause is not USURY... The cause is AVARICE...”“”

    Apr 21st, 2014 - 07:49 am - Link - Report abuse 0
  • golfcronie

    @1
    I THINK if you want to borrow money you have to pay it back. SIMPLE really.
    If Argentina wins this case then it opens the door to other third world countries to do the same. Do you know of anyone I can borrow money off and not pay it back? I would be seriously interested.

    Apr 21st, 2014 - 09:26 am - Link - Report abuse 0
  • yankeeboy

    The IMF/US want a sovereign bankruptcy court so filthy deadbeat scofflaws won't emulate Argentina in the future.

    Argentina gave preferential trade treatment to Brazil and Mexico in trade for their amicus brief. So they will be ignored.

    We should be able to tell by the questions that are asked where this will come out.

    Apr 21st, 2014 - 10:50 am - Link - Report abuse 0
  • Think

    Turnip at (2)

    My bad...

    I shouldn't use difficult foreign loanwords as AVARICE or USURY when in the presence of monolingual brainwashed Turnips....

    Apr 21st, 2014 - 11:27 am - Link - Report abuse 0
  • Holdout.from.Germany

    The way to help monarchs is to support the contracts they sign. Siding with creditors control data from Argentina, U.S. courts are helping all borrowers gain access to credit markets on competitive terms. If the court does not comply with the promises made by borrowers, investors will not lend to them or insist on higher interest rates as compensation for their increased risk in case of default.

    History is full of examples of governments that renege on their promises to investors. By keeping to their promises should be viewed as a victory for the law and international standards.

    In support of Judge Griesa, the second Court of Appeal said that “in New York, a bond is a contract” dispute and the parties' presents a simple matter of contract interpretation. ”

    In the business world, in fact enforce the terms of the contracts is the way to nourish markets and generate economic growth.

    The claim that the sovereigns are not subject to the rule of law fails to recognize that if the U.S. courts refuse to enforce contracts, sovereign nations and corporate borrowers will be motivated to enter into contracts in places that they adhere to.

    New York remains the commercial capital of the world. Sophisticated parties around the world routinely specify that the New York law, as interpreted by the courts of New York should govern disputes in international agreements, even when no party U.S. is involved in the deal.

    And 'the willingness of judges to keep people and governments to their promises that allows the city to maintain its dominant position. Indeed, that allows a free economy to operate. We can only hope that the Supreme Court held in mind.

    Mr. Macey is a professor at Yale Law School.

    Apr 21st, 2014 - 11:29 am - Link - Report abuse 0
  • Captain Poppy

    golf.....you forgot to add:

    If you do not like the terms and feel they are usury, DO NOT BORROW WHEN YOU ARE A HIGH CREDIT RISK. Wait for better terms.

    Apr 21st, 2014 - 11:34 am - Link - Report abuse 0
  • Holdout_from_Germany

    The original debt was sold to investors with an explicit term that disputes will be settled in New York under New York law. E in the controversy continues, the holdouts rely on the courts of the United States to enforce a clause in the bond covenant that requires Argentina to treat everyone the same bondholders.

    This clause, known to lawyers as a pari passu clause, it means that Argentina can not choose among the creditors with laws such as the law Lock.

    In early 2012, federal Judge Thomas P. Griesa of the Southern District of New York prevented Argentina from making payments on the debt issued thereafter without paying what needs to holdouts. If Argentina pays the owners of the new debt 5% of what it owes them, but must also pay 5% of what is owed to the holdouts. When the new bonds are paid in full, the holdouts would have been paid in full as well.

    To apply the judgment of the court, the judge Griesa also allowed investors in defaulted Argentine bonds of citation information from banks, including Bank of America Corp. BAC 0.12% and Banco de la Nacion Argentina, on which the 'Argentina is storing its activities around the world. Griesa The judge rightly said that its decision rested on “the public interest in enforcing contracts and upholding the rule of law,” and was upheld on appeal.

    Argentina has filed an appeal to the Supreme Court, and the Obama administration has taken his side. The Justice Department of the United States argued that to enforce the terms of the agreement will make future debt restructurings more difficult and undermine the United States' interest “in promoting the principles of reciprocal international immunity of the central bank.” Scholars have also argued that their contracts comply with Argentina against it could undermine debt restructuring.
    These arguments are false. Any country that wants to restructure so that Argentina is trying to do may simply refuse to put equal treatment clauses in their contracts.

    Apr 21st, 2014 - 11:40 am - Link - Report abuse 0
  • yankeeboy

    Usury? How so? The holdouts didn't change the rate.
    Avarice? Don't they just want to get paid? How is that avarice? You mean the Ks?

    Think, you are such an idiot. BTW was it morning in Chubut when you posted? Or night in the EU? Yeah night in the EU. Fcking liar.

    Pay back what you owe and everyone will leave Argentina to destroy itself.
    My guess is Argentina will lose. A bond is a contract, there's 200+ yrs of case law saying they are required to pay.

    Apr 21st, 2014 - 11:44 am - Link - Report abuse 0
  • Holdout:from:Germany

    see more->

    http://online.wsj.com/news/articles/SB10001424052702303663604579501254236812262

    Argentina has filed an appeal to the Supreme Court, and the Obama administration has taken his side. The Justice Department of the United States argued that to enforce the terms of the agreement will make future debt restructurings more difficult and undermine the United States' interest “in promoting the principles of reciprocal international immunity of the central bank.” Scholars have also argued that their contracts comply with Argentina against it could undermine debt restructuring.
    These arguments are false. Any country that wants to restructure so that Argentina is trying to do may simply refuse to put equal treatment clauses in their contracts.

    Apr 21st, 2014 - 11:50 am - Link - Report abuse 0
  • Think

    Comment removed by the editor.

    Apr 21st, 2014 - 11:58 am - Link - Report abuse 0
  • ChrisR

    Don’t you just love it when the biggest liar on MP, The Lunatic of Chew Butt, somebody who is so far up the arse of TMBOA he “thinks” it’s a chocolate he’s eating, is trying to get us believe that the argies have the welfare of the “little countries” at heart.

    Of course there is no AVARICE involved at all. The K’s and everybody else who grabbed the money and are now denying any responsibility are as pure as the driven snow.

    What an arsehole this immigrant to Argentina is.

    Apr 21st, 2014 - 12:29 pm - Link - Report abuse 0
  • Conqueror

    @7 I do wonder about the U.S. government sometimes. On the one hand, it's okay for the NSA to monitor communications around the world for the sake of fighting against terrorism. I don't have a problem with that. If they can find anything in the emails I send, an expenses-paid trip to the U.S. would be nice. Can I go to Dallas? I have friends there. Anyway, I'm a British national. Power comes from the people, doesn't it? Why don't I get foreign sovereign immunity? Never mind the U.S. Act. Just go with pure logic. I can accept being subject to U.S. legislation if I'm in the U.S. But subject to U.S. legislation when I'm still in the UK?

    Anyway. Now the U.S. Government is going to stand up and say that argieland doesn't have to comply with judgements and sub-poenas of U.S. courts that involve non-U.S. assets?

    Monitoring hundreds of millions of communications is okay, but pursuing a criminal isn't? Got any other laws in the U.S. that enable criminals to get off scot-free?

    Any chance you could ask your Congressman/Senator?

    Apr 21st, 2014 - 12:31 pm - Link - Report abuse 0
  • Condorito

    It is in no ones interest that the holdouts win. Everyone knows how national defaults can ripple through the global economy. Everyone knows the poor suffer the most.

    Besides the pragmatics of it, Argentina is in the right (if there is such a thing in these cases): they defaulted, they re-structured, creditors took a hit. Essentially the same as every other sovereign default case in modern times.

    They have met their obligations to the vast majority who accepted the re-structuring. The recovery rate is higher than that of the Greek default.

    Apr 21st, 2014 - 12:49 pm - Link - Report abuse 0
  • yankeeboy

    Essentially is the key word. If it was the same as other structured defaults they wouldn't be in this mess.
    It was a take it or leave it deal.
    Some of them left it.
    Argentina is not “in the right” they've lost every case over this default for the last decade.
    In the end they will pay.

    Apr 21st, 2014 - 01:12 pm - Link - Report abuse 0
  • Tobers

    Think - you love to turn up on the 'victory' articles but are absent on almost all other articles. This suggests you are unbalanced, crass and lacking in humility.

    Meanwhile one of the champions of the people Anibal 'sufferer of small man syndrome' Fernandez has had his $150000 BMW - car of the 'oligarchs' - stolen.

    Apr 21st, 2014 - 01:28 pm - Link - Report abuse 0
  • Condorito

    @yankeeboy
    I agree that they haven't been sensible. You could compare their handling of the default with that of Uruguay at the same time to see that. Uruguay was done and moved within 2 years.

    Argentina chose to play the tough guy and they have paid the price of their stupidly obstinate approach. However countries are allowed to default as are people and businesses. In the case of countries there are no internationally agreed rules.

    NML invested in a very high risk bond with the intention of playing this game. As yet they haven't cashed in (personally I am happy with that). The bigger picture is that countries have to be able to default on their obligations. That is more important than NML & co and I think that will be the logic that prevails.

    @2 golfcronie
    “Do you know of anyone I can borrow money off and not pay it back?”
    Yes, your bank.

    Apr 21st, 2014 - 01:49 pm - Link - Report abuse 0
  • yankeeboy

    Yes countries are allowed to default that is not what is up for a ruling. What they are discussing is the ability of a country to hide assets and refuse to pay court awarded judgements.
    There's not anyone who thinks Argentina will win.

    Apr 21st, 2014 - 01:59 pm - Link - Report abuse 0
  • Think

    Turnip at(15) says...:
    “Meanwhile one of the champions of the people Anibal 'sufferer of small man syndrome' Fernandez has had his $150,000 BMW - car of the 'oligarchs' - stolen.”

    I say...:
    Why do turnips always have to exxagerate about anything Argentinean...?

    He is speaking about this car...:
    http://www.clarin.com/inseguridad/BMW-Anibal-Fernandez-robado-hoy_CLAIMA20140420_0187_14.jpg

    As far as my trained eye can see (I have a sahara beige 2002), that's a 2011's BMW 320I Sedan that had a pricetag in Argentina of ~45,000 U$
    More of a “Muhammed” or an “Omar”car than an “Oligarch's” if somebody asks me...

    Apr 21st, 2014 - 02:13 pm - Link - Report abuse 0
  • Condorito

    @17 yankeeboy
    They are not hiding assets. The Bank of America clearly doesn't feel obliged to hand over the information that NML is seeking in regards to Argentina's assets. That is a US corporation operating within the bounds of their interpretation of the law.

    The court awarded judgements can't be enforced because they exceed the jurisdiction of that court, hence escalation to the SC.

    If the SC decides that those who opted out of the restructure process could enforce their claims on non-US assets, this would set an unworkable precedent for future defaults.

    Apr 21st, 2014 - 02:44 pm - Link - Report abuse 0
  • yankeeboy

    They are absolutely hiding asset and deliberately keeping out of the supposed USA jurisdiction to avoid paying them.

    They are scofflaws, scumbags and thugs and I am sure SCOTUS realizes this.

    Apr 21st, 2014 - 02:51 pm - Link - Report abuse 0
  • Don Alberto

    Think, how many generations back can you trace your ancestors in South America?

    Apr 21st, 2014 - 04:42 pm - Link - Report abuse 0
  • yankeeboy

    Told ya...

    (Reuters) - U.S. Supreme Court justices on Monday indicated that creditors should be able to seek limited information about Argentina's non-U.S. assets in a case stemming from long-running litigation over Argentina's obligations to bond investors.

    During the one-hour oral argument concerning hedge fund NML Capital Ltd's efforts to seek repayment, several justices suggested military and diplomatic assets should be off-limits, which would narrow the scope of the ruling.

    A separate and more high-profile case - in which Argentina is challenging a court judgment ordering it to pay $1.33 billion to the so-called holdout bond investors or face a potential default if it refuses to do so - is also pending before the U.S. high court.

    (Reporting by Lawrence Hurley; Editing by Will Dunham)

    Apr 21st, 2014 - 05:01 pm - Link - Report abuse 0
  • ChrisR

    @ 22 yankeeboy

    Well, who’d have thunk it.

    Well, you, me and those who want the Law of Contract to be upheld.

    No surprise about the military (not that it’s worth anything) or that diplomatic assets should be exempt, but everything else is now fair game.

    Cue the whining and wailing from TMBOA how it’s NEVER the argies fault.

    Apr 21st, 2014 - 05:14 pm - Link - Report abuse 0
  • yankeeboy

    I don't understand why NML has not taken the YPF shares yet. It obviously a commercial asset owned by the Gov't.
    It is gonna be really hard for them to hide assets now
    Also I can see them going after CFKs ill gotten gains too

    I love the USA.

    Apr 21st, 2014 - 05:19 pm - Link - Report abuse 0
  • Brit Bob

    Watch Argentina Defy a U.S. Judge

    http://www.atfa.org/

    Apr 21st, 2014 - 07:06 pm - Link - Report abuse 0
  • Klingon

    @ 25 You are obviously one of Elliot's paid trolls.

    All that is really at stake is if this scumbag old businessman gets to make $$ off a high risk deal he made or not.
    He could walk away it's not like he needs the money to eat, but would rather throw millions into poverty.

    Apr 21st, 2014 - 08:00 pm - Link - Report abuse 0
  • yankeeboy

    26. The consequences are irrelevant. Most sane people would place the blame of throwing “millions into poverty” where it belongs with the Ks.

    25. That would be very foolish when it is obvious to everyone that Argentina will need an IMF bailout shortly. There is no way the USA could allow a known scofflaw get U$ from the IMF without first coming into alignment with our laws.
    CFK has backed herself into a corner.
    and she knows it

    I can't wait to see how this rolls out

    Apr 21st, 2014 - 08:26 pm - Link - Report abuse 0
  • golfcronie

    No THINK, You did not answer my question, again where can I borrow money and not pay it back?

    Apr 21st, 2014 - 08:47 pm - Link - Report abuse 0
  • Think

    Turnip at (28)

    I normally don't interact with Turnips.....
    Anyhow....., I suggest you read comment No.(13) of my Pragma-dogmatic Capitalist Shilean Brother, Mr. Condorito...
    He says (quite rightly)...:
    ”They (The Argentineans) have met their obligations to the vast majority who accepted the re-structuring. The recovery rate is higher than that of the Greek default.”

    Educate yourself...

    Apr 21st, 2014 - 09:20 pm - Link - Report abuse 0
  • yankeeboy

    Scalia said he found it “extraordinary” that no foreign country had filed a brief in support of Argentina in the bank case. “Not a single foreign country, maybe because Argentina owes them money as well as it does these plaintiffs,” he said, drawing laughter from the audience.

    Argentina is always getting laughed at.

    They are so narcissistic and out of touch with reality it always seems to bite them in the As* when they have to deal with the outside world.

    Apr 21st, 2014 - 09:31 pm - Link - Report abuse 0
  • Think

    USURA
    With usura hath no man a house of good stone
    each block cut smooth and well fitting
    that design might cover their face,
    … with usura, sin against nature,
    is thy bread ever more of stale rags
    is thy bread dry as paper,
    … with usura is no clear demarcation
    and no man can find site for his dwelling.
    Stonecutter is kept from his tone
    weaver is kept from his loom,
    … with usura wool comes not to market
    sheep bringeth no gain with usura
    … Usura is a murrain, usura
    blunteth the needle in the maid’s hand
    and stoppeth the spinner’s cunning.
    … Usura slayeth the child in the womb
    It stayeth the young man’s courting
    It hath brought palsey to bed, lyeth
    between the young bride and her bridegroom
    … CONTRA NATURAM
    They have brought whores for Eleusis
    Corpses are set to banquet
    at behest of usura.

    Ezra Pound

    Apr 21st, 2014 - 09:40 pm - Link - Report abuse 0
  • yankeeboy

    31. Too bad you obviously don't understand the meaning of the word.

    BCRA is paying 28% isn't that usury?
    It so hard to say when its actually less than inflation.

    Bahahahahaha

    Apr 21st, 2014 - 09:45 pm - Link - Report abuse 0
  • Think

    TWIMC

    Usury has NOTHING to do with percents or inflation…
    Usury is a monstruosity levied on people without regard to the possibilities of production.

    https://www.youtube.com/watch?v=lDQLgG1yuLU

    Educate yourself…

    Apr 21st, 2014 - 10:02 pm - Link - Report abuse 0
  • yankeeboy

    33. Then you should be talking to your Prez about it. The Ks created this mess.
    I hear electricity rates are only going up 800%!!
    Bahahahhaahaa
    breath
    hahahahhahaaa

    stop lying and telling 1/2 truths idiot.

    How's the Soy sales going are filling up the BCRA reserves enough to pay for fuel this winter?
    nope

    Apr 21st, 2014 - 10:52 pm - Link - Report abuse 0
  • Don Alberto

    Think, how many generations back can you trace your ancestors in South America?

    Apr 22nd, 2014 - 08:56 am - Link - Report abuse 0
  • ChrisR

    @ 29 The Lunatic From Chew Butt
    “I normally don't interact with Turnips.....”

    I have also noticed you don’t interact with us either. Could the reason be that we always defeat you puerile arguments. You really need to up your game it’s getting boring.

    BTW
    “(The Argentineans) have met their obligations to the vast majority who accepted the re-structuring. The recovery rate is higher than that of the Greek default.”

    The default was a take it or leave it “offer” from your despicable government. The only ones who could afford it were the banks and we know who paid for the shortfall, don’t we? I suspect you have no idea who paid so I will tell you: the bank’s customers as always.

    I will offer you another piece of excellent advice. DON’T EDUCATE YOURSELF; YOU WOULD BE TAKING ADVICE FROM AN IDIOT.

    No need to thank me, don’t even “Think” about it.

    Lunatic.

    Apr 22nd, 2014 - 11:16 am - Link - Report abuse 0
  • Brit Bob

    @ 25 Klingon. Thanks. Lol.

    Apr 22nd, 2014 - 01:36 pm - Link - Report abuse 0
  • british bomber

    This is a case of Wall St against Main St. From Wall St NML want to steal Main St widows bond holders' payments.

    Apr 24th, 2014 - 07:58 am - Link - Report abuse 0
  • ChrisR

    38 british bomber

    Don't think so, the lower court judgement relates to all bondholders including the banks that “took” the take-it-or-leave-it cut.

    And we all know who paid their end, don't we: all the banks customers, including “widows”.

    If you have ANY link to prove me incorrect, please post it.

    Apr 24th, 2014 - 10:59 am - Link - Report abuse 0
  • british bomber

    Chris R, my mother is a widow.

    Apr 27th, 2014 - 05:49 pm - Link - Report abuse 0
  • ChrisR

    @ 40 british bomber
    “my mother is a widow”

    That is the way of life and unless they die together in an accident or whatever the majority of couples have one die before the other and this is hardly an argument.

    However, I take it that your mother took the “take it or leave it” so called offer? Otherwise she is sitting on bonds hoping at some time in the future either to have an income from them or to be able to sell them at some reasonable price that reflects the original investment.

    Many, many other older people are in exactly this position because, for one reason or another they trusted Argentina NOT to shaft them.

    I don’t know why NML have so much opprobrium heaped upon them; they are businessmen who saw an opportunity to recover many times their original investment. Just why this should affect your mother I have no idea, the judgement in NML’s favour instructed Argentina to treat ALL bondholders the same when it comes to earnings. If your mother has held onto the original bonds this will be the first payment she will have since the haircut.

    There is a potential problem in that Argentina, being a scofflaw and broke is likely to reject the court’s ruling but she will not be in any worse position will she? And is it reasonable to blame NML for the dastardly action of Argentina?

    For Argentina to stop ALL payouts would give them more trouble than enough in the international money markets (if that were possible).

    You must bear in mind for any future investments your mother or you make this simple thought: “if it looks too good to be true, it probably is” and steer clear of it unless you really understand the situation AND CAN AFFORD TO LOSE THE MONEY. It's the only way I know to avoid problems.

    Apr 27th, 2014 - 09:38 pm - Link - Report abuse 0
  • british bomber

    Just like during the GR Wall St nml see an opportunity to screw main st and they are taking it. They are stealing from poor widows.

    Apr 29th, 2014 - 06:00 am - Link - Report abuse 0
  • *~TROLLING_CEASE_FIRE~*

    They better hurry up the process, the USA is heading straight into a Racial Holy War, and it's gonna get very ugly.

    Apr 30th, 2014 - 04:53 pm - Link - Report abuse 0

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