Do you have adblock enabled?
If you can read this, either the style sheet didn't load or you have an older browser that doesn't support style sheets. Try clearing your browser cache and refreshing the page.

(Bloomberg)   Argentina defaults on its debt for the second time, here's what's likely to happen   (bloomberg.com) divider line 47
    More: Interesting  
•       •       •

1815 clicks; posted to Business » on 31 Jul 2014 at 8:13 AM (42 weeks ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



47 Comments   (+0 »)
   
View Voting Results: Smartest and Funniest
 
ZAZ [TotalFark]
2014-07-31 08:03:23 AM  
 
2014-07-31 08:23:46 AM  
They are illusions
They are not the solutions they promised to be
The answer was here all the time
I love you and hope you love me
 
2014-07-31 08:39:29 AM  
Does this mean we can expect another invasion of the Falklands?
 
2014-07-31 08:43:18 AM  
Cats and dogs living together
 
2014-07-31 08:46:02 AM  

Robo Beat: Does this mean we can expect another invasion of the Falklands?


No an actual invasion would be disastrous to Argentina. They'll just keep blaming Britain for oppressing all those poor non-existent native Falklanders in order to distract from the fact Kirchner is driving the country into the ground.
 
2014-07-31 08:54:17 AM  
Someone will cry for Madonna?
 
2014-07-31 09:11:49 AM  

To The Escape Zeppelin!: Robo Beat: Does this mean we can expect another invasion of the Falklands?

No an actual invasion would be disastrous to Argentina. They'll just keep blaming Britain for oppressing all those poor non-existent native Falklanders in order to distract from the fact Kirchner is driving the country into the ground.


True dat, but just because it doesn't make sense is no reason for Kirchner not to do it if she thinks she's backed into a corner.  The junta back in '82 knew they'd get their asses handed to them by the UK, but they did it anyways because they convinced themselves the Brits wouldn't come after them.
 
2014-07-31 09:13:59 AM  

ZAZ: Forbes is rather critical of vulture capitalists today.


If you don't want to deal with "vulture capitalists", don't make your economy resemble a starving Ethiopian child.
 
2014-07-31 09:17:28 AM  
I can't watch the video but based on what I read about the situation in the other articles, the situation is that Argentina was desperate for money during their economic crisis, so they issued bonds with high returns hoping that bond buyers will infuse them with capital in the short term.

And now that bond buyers bought them and infused them with capital, they want those bond buyers who bailed them out to take 1/3rd of what they bought and blaming the ones who don't agree as being some sort of predatory lender.

Is that the gist of the situation? That's what I'm from it.
 
2014-07-31 09:26:39 AM  
Argentina?!

*spit*
/Gaucho
 
2014-07-31 09:27:55 AM  
In the city of fury....

/obscure
 
2014-07-31 09:32:19 AM  
It sounds like it will only impact in the US will be the billionaires who were dumb enough to invest in Argentinean bonds.
 
2014-07-31 09:36:22 AM  
They should have bet on Germany.
 
2014-07-31 09:36:29 AM  
So a staunch libertarian insisted on a course that left everyone a loser? I can't believe it.
 
2014-07-31 09:36:33 AM  
Nothing?
 
2014-07-31 09:39:22 AM  

RexTalionis: I can't watch the video but based on what I read about the situation in the other articles, the situation is that Argentina was desperate for money during their economic crisis, so they issued bonds with high returns hoping that bond buyers will infuse them with capital in the short term.

And now that bond buyers bought them and infused them with capital, they want those bond buyers who bailed them out to take 1/3rd of what they bought and blaming the ones who don't agree as being some sort of predatory lender.

Is that the gist of the situation? That's what I'm from it.


Kinda. The issue is that Argentina is being held legally liable for all of the debt it defaulted on back from its 2001 debacle. They negotiated all of that defaulted debt down except for a few holdouts, who demanded full payment. Then a US Court said that Argentina HAS to pay the holdouts the full amount. Argentina tried to only pay the negotiated debt but since the intermediary bank they use is in the US, the bank didn't pay it out since it would have been in contempt of court. The other issue is Argentina's bonds have a clause that says if anyone gets a better deal than you in negotiations, then our previous deal is done and we have to start negotiations all over again (I call it the Travelocity clause). So if Argentina paid off the holdouts, they'd have to pay 100% to the folks they already negotiated with, which they don't have the ability to do.
 
2014-07-31 09:43:43 AM  

RexTalionis: I can't watch the video but based on what I read about the situation in the other articles, the situation is that Argentina was desperate for money during their economic crisis, so they issued bonds with high returns hoping that bond buyers will infuse them with capital in the short term.

And now that bond buyers bought them and infused them with capital, they want those bond buyers who bailed them out to take 1/3rd of what they bought and blaming the ones who don't agree as being some sort of predatory lender.

Is that the gist of the situation? That's what I'm from it.


Sort of. They wanted to borrow but lenders were understandably hesitant given previous restructurings and defaults on bonds issued under Argentine law.

To give investors greater comfort (and reduce the interest rate needed), Argentina issued some bonds under US law. Now they want to get out of paying on these bonds but want to pay later bond holders, and the us court is telling them no. Either you pay all or you pay none.
 
2014-07-31 09:44:12 AM  
The bigger issue here is that the US has just said if you default on your debt, you still have to pay it off or you can never offer any debt through US banks or intermediaries ever again (the student loans of international bond markets, if you will). This has the potential to splinter and create a tiered bond market where Italian bonds bought in New York could cost more than those bought in London or Frankfurt because of different laws in different countries.
 
2014-07-31 09:45:06 AM  

RexTalionis: I can't watch the video but based on what I read about the situation in the other articles, the situation is that Argentina was desperate for money during their economic crisis, so they issued bonds with high returns hoping that bond buyers will infuse them with capital in the short term.

And now that bond buyers bought them and infused them with capital, they want those bond buyers who bailed them out to take 1/3rd of what they bought and blaming the ones who don't agree as being some sort of predatory lender.

Is that the gist of the situation? That's what I'm from it.


My understanding is that Elliot bought bad Argentine debt at a discount, and now wants face value on the bonds, when almost everyone else agreed to lose 70% of that, and when the terms of the bonds prevent Argentina from paying any bond holder more than the others got. Essentially, the Argentines are refusing to pay a collection agency, with at least some slight justification..
 
2014-07-31 09:47:38 AM  

Negligible: RexTalionis: I can't watch the video but based on what I read about the situation in the other articles, the situation is that Argentina was desperate for money during their economic crisis, so they issued bonds with high returns hoping that bond buyers will infuse them with capital in the short term.

And now that bond buyers bought them and infused them with capital, they want those bond buyers who bailed them out to take 1/3rd of what they bought and blaming the ones who don't agree as being some sort of predatory lender.

Is that the gist of the situation? That's what I'm from it.

Kinda. The issue is that Argentina is being held legally liable for all of the debt it defaulted on back from its 2001 debacle. They negotiated all of that defaulted debt down except for a few holdouts, who demanded full payment. Then a US Court said that Argentina HAS to pay the holdouts the full amount. Argentina tried to only pay the negotiated debt but since the intermediary bank they use is in the US, the bank didn't pay it out since it would have been in contempt of court. The other issue is Argentina's bonds have a clause that says if anyone gets a better deal than you in negotiations, then our previous deal is done and we have to start negotiations all over again (I call it the Travelocity clause). So if Argentina paid off the holdouts, they'd have to pay 100% to the folks they already negotiated with, which they don't have the ability to do.


Alright, fair enough.
 
2014-07-31 09:48:01 AM  
Stocks are taking an ass whoopin today. Only 9:47 and they're already down .75%
 
2014-07-31 09:54:56 AM  
Has the Royal Navy been put on alert ?
 
2014-07-31 09:58:40 AM  

Robo Beat: Does this mean we can expect another invasion of the Falklands?


static3.wikia.nocookie.net
 
2014-07-31 10:00:30 AM  

RexTalionis: I can't watch the video but based on what I read about the situation in the other articles, the situation is that Argentina was desperate for money during their economic crisis, so they issued bonds with high returns hoping that bond buyers will infuse them with capital in the short term.

And now that bond buyers bought them and infused them with capital, they want those bond buyers who bailed them out to take 1/3rd of what they bought and blaming the ones who don't agree as being some sort of predatory lender.

Is that the gist of the situation? That's what I'm from it.


It's more complicated than that.

Start Here:  http://en.wikipedia.org/wiki/Brady_Bonds

Then here:  http://blogs.reuters.com/alison-frankel/2011/07/21/bondholder-beats-a r gentina-on-appeal-but-still-may-not-recover/

Both are short and concise.  Then any current article will make sense.
 
2014-07-31 10:00:50 AM  

forgotmydamnusername: My understanding is that Elliot bought bad Argentine debt at a discount, and now wants face value on the bonds, when almost everyone else agreed to lose 70% of that, and when the terms of the bonds prevent Argentina from paying any bond holder more than the others got. Essentially, the Argentines are refusing to pay a collection agency, with at least some slight justification..


You buy discounted bonds because you believe that you can get full payment, but that it will be expensive or risky.  Given the Argentina pretty much had to include a series of intensely dangerous provisions, the most dangerous being the pari passu clause (We all get the same price), to get people to buy these things also doesn't help.  

Its not really predatory lending when lending to a sovereign state - mainly because sovereign states can do things like this and just say "nope."  Other than getting an army together, there really is nothing a lender can do but say "ok, never lend to Argentina again"  And since Argentina already did this 12 years ago, that is precisely the reason Argentina had to sell such cruddy bonds.
 
2014-07-31 10:10:40 AM  

shanteyman: Has the Royal Navy been put on alert ?


The UK Navy is far smaller than it was thirty years ago, and they don't even have any Harriers anymore while they wait for the F35. But if Argentina tried anything it would be very different from 1982. For one the Falklands has a small squadron of Typhoons based there plus anti aircraft missiles, and you can bet UK intelligence is watching Argentinian forces very closely. There is no way they'd be able to take the islands anyway as quickly and easily so if it was necessary to send a task force it wouldn't need the carriers and Harriers they needed in 82. They'd have Stanley airport and its beefed up facilities.
And that's not even considering any RN submarines that may or may not be in the area. They have torpedoes and no problem in using them, as the General Belgrano found out.
 
2014-07-31 10:13:05 AM  

RexTalionis: I can't watch the video but based on what I read about the situation in the other articles, the situation is that Argentina was desperate for money during their economic crisis, so they issued bonds with high returns hoping that bond buyers will infuse them with capital in the short term.

And now that bond buyers bought them and infused them with capital, they want those bond buyers who bailed them out to take 1/3rd of what they bought and blaming the ones who don't agree as being some sort of predatory lender.

Is that the gist of the situation? That's what I'm from it.


Argentina defaulted on their external debt in 2001.      Argentina restructured their debt and worked out a settlement with 93% of  bondholders swapping out , basically giving them 25 cents on the dollar.   (not unlike a personal bankruptcy)    7% of the bondholders held out and refused to participate with the settlement, most notably a few high profile US hedge funds (aka the so-called "vulture capitalists").    Many of these hedge funds bought Argentina's debt after it had already defaulted for pennies on the dollar, thinking at the very least they could sue Argentina and win a court settlement that would net a hefty rate of return.    It should be noted that the most profile hedge fund involved in this dispute is Paul Singer's Elliot Management.   Singer has a long history of these kinds of deals.  Singer has previously bought distressed defaulted sovereign debt in Peru, Congo and then sued the countries and then sued those countries for default and won settlements that doubled or tripled what he bought the distressed debt for.

   Part of the settlement with the 93% involved a contractual clause that said Argentina couldn't negotiate a better deal with the holdouts down the road.   If they did, they would have to give the same conditions to everyone.    Argentina claims they couldn't settle with these 7% of holdouts even if they wanted to, without breaking the contractual clause they are bound to by the other 93% of bondholders.   Singer and a few of the other hedge funds comprising the 7%  took Argentina to court, and claimed that their contractual agreement with the 93% has no bearing on their obligations to them.  A Manhattan Judge agreed with the hedge funds.    The Supreme Court refused to take up the case.    Argentina says it's hands are tied.    The hedge funds, leveraged by the court rulings have been trying to negotiate a sweet settlement deal that would net them a huge rate of return on their initial investment.   It's been a big game of chicken.
 
2014-07-31 10:38:53 AM  
maximum freedom, like here is the USA?
 
2014-07-31 11:12:00 AM  

InmanRoshi: It's been a big game of chicken.


This is possibly the best way to describe it.  No one is particularly good here, and each side gets to claim they are the victim, and the losers, as usual, are the Argentinian citizenry.
 
2014-07-31 11:22:26 AM  
IMHO, one should agree to pay what they owe if they are able.  I totally side with the hedge funds here via this simple logic.
 
2014-07-31 11:27:33 AM  

Geotpf: IMHO, one should agree to pay what they owe if they are able.  I totally side with the hedge funds here via this simple logic.


Yea as much as I dislike the hedge funds it looks like Argentina never had any intention of repaying the full value of the debt and the debt holders are perfectly withing their rights to hold it over them.
 
2014-07-31 11:36:54 AM  

Geotpf: IMHO, one should agree to pay what they owe if they are able.  I totally side with the hedge funds here via this simple logic.


The problem for Argentina is if they worked out a settlement with the 7%, it would immediately nullify the contractual agreements they've worked out with the other 93%.   The 93% could then come after them and get the same sweetened deal that they gave to the 7%, and completely wipeout the country.
 
2014-07-31 11:51:17 AM  

InmanRoshi: Geotpf: IMHO, one should agree to pay what they owe if they are able.  I totally side with the hedge funds here via this simple logic.

The problem for Argentina is if they worked out a settlement with the 7%, it would immediately nullify the contractual agreements they've worked out with the other 93%.   The 93% could then come after them and get the same sweetened deal that they gave to the 7%, and completely wipeout the country.


Forgot to add, what will ultimately happen is that a group of Argentinian private business and banks who are getting arse raped by rising interest rates from the default will end up buying the off the debt from the hedge fund managers.

I'm hoping the precedent that you can buy defaulted distressed debt for pennies on the dollar and then put the screws to a sovereign country and it's citizens just for the sake of making a 2X or 3X ROI ends sooner rather than later.
 
2014-07-31 11:54:07 AM  
Argentina has defaulted on its debt countless times in the past. That's why they had to sign this current unfavorable deal in NY jurisdiction in the first place.

InmanRoshi: I'm hoping the precedent that you can buy defaulted distressed debt for pennies on the dollar and then put the screws to a sovereign country and it's citizens just for the sake of making a 2X or 3X ROI ends sooner rather than later.


You should be hoping that the precedent that a country can borrow itself into oblivion over and over again ends sooner rather than later.
 
2014-07-31 12:02:37 PM  

MugzyBrown: Argentina has defaulted on its debt countless times in the past. That's why they had to sign this current unfavorable deal in NY jurisdiction in the first place.

InmanRoshi: I'm hoping the precedent that you can buy defaulted distressed debt for pennies on the dollar and then put the screws to a sovereign country and it's citizens just for the sake of making a 2X or 3X ROI ends sooner rather than later.

You should be hoping that the precedent that a country can borrow itself into oblivion over and over again ends sooner rather than later.


Dude, when the farking editorial board of the Financial Times is saying your business ethics are beyond the pale, your business practices are beyond the pale.   That's like being called out by Hot Air for having too much Derp.

If we're talking about taking responsibility and all of that, exactly who put the gun to the hedge funds heads and made them buy defaulted, distressed debt ?  I didn't know buying distressed debt should come with no risks.
 
2014-07-31 12:04:19 PM  

InmanRoshi: If we're talking about taking responsibility and all of that, exactly who put the gun to the hedge funds heads and made them buy defaulted, distressed debt ?  I didn't know buying distressed debt should come with no risks.


They're not without risks.  Argentina can just default and they lose their money.
 
2014-07-31 12:17:11 PM  

RexTalionis: I can't watch the video but based on what I read about the situation in the other articles, the situation is that Argentina was desperate for money during their economic crisis, so they issued bonds with high returns hoping that bond buyers will infuse them with capital in the short term.


The market sets the returns I believe.

Obviously once you're past 7%, which is the magic number the EU uses at what is unsustainable, it's not a good idea to issue bonds. Because you can not give a return of 7%+.
 
2014-07-31 12:18:53 PM  

Rev.K: They should have bet on Germany.


Heh yeah, but soccer asside.

It's amusing how, Germany rather than the EU for some reason, gets shamed for being mean to poor Greece.

Well, Greece, look at Argentina, that's what happends if someone with an iron fist doesn't come in and clean house.
 
2014-07-31 12:21:00 PM  

Negligible: The bigger issue here is that the US has just said if you default on your debt, you still have to pay it off or you can never offer any debt through US banks or intermediaries ever again (the student loans of international bond markets, if you will). This has the potential to splinter and create a tiered bond market where Italian bonds boughtissued in New York could cost more than those boughtissued in London or Frankfurt because of different laws in different countries.


Where they are traded is not what is causing the problem - it is under what jurisdiction they were issued.  To get a better interest rate on external debt, Argentina issued bonds in the US, denominated in US dollars, under US law.  We don't have much in the way of bankruptcy law for foreign sovereigns, so the courts are kind of making it up as we go along.  In US corporate bankruptcy, there would have been a cram-down provision on the hold outs and this wouldn't be an issue.

Argentina, like Mexico, has learned you don't issue sovereign debt in a foreign jurisdiction the hard way.  But they were attempting to overcome market access issues that were raised because of previous defaults...  without the structure of US law the bonds might not have been marketable, and they wanted (politically needed) growth now, not later.

Not sure where I come out on the whole situation though - on one hand I can see why some just say "you signed up for those rules to get money, pay up" while on the other hand I look at the holdouts and say "Mark to market biatches - them's worth what the renegotiated majority agreed they are worth.  You took a flyer and it isn't paying out how you expected, tough luck".

I don't see how a 3rd party buying out the remaining bond holders work... unless it is the Argentinian central bank paying out foreign reserves and then eventually being made whole by the Argentinian government.  Which triggers that RUFO if it takes place before 2015.

Bad choices for everyone involved.
 
2014-07-31 12:36:55 PM  

MugzyBrown: Argentina has defaulted on its debt countless times in the past. That's why they had to sign this current unfavorable deal in NY jurisdiction in the first place.

InmanRoshi: I'm hoping the precedent that you can buy defaulted distressed debt for pennies on the dollar and then put the screws to a sovereign country and it's citizens just for the sake of making a 2X or 3X ROI ends sooner rather than later.

You should be hoping that the precedent that a country can borrow itself into oblivion over and over again ends sooner rather than later.


The market, not the countries, has to recognize that a sovereign issuing debt in a foreign jurisdiction is a non-starter.  Numerous countries have gotten themselves into external debt default this way - Mexico, Argentina, and several EU countries (because the Euro debt market is managed collectively, each EU country is effectively issuing debt in a foreign jurisdiction - the split between economic unity and political disunity is the main cause of stability issues in the Eurozone).

But the politicians have to deliver better economic results now, not later.  So countries will use whatever mechanism they can to raise revenue.  Even if it means crippling their future.  It's one of the weak parts of having democracies (the other is reaction time - democracies are slow in reacting to potential, future threats).  This is on the market to correctly price the interest rates that countries would have to pay - ie. you won't get much of a discount from what you'd have to pay in your own jurisdiction.
 
2014-07-31 12:43:51 PM  

MadHatter500: Negligible: The bigger issue here is that the US has just said if you default on your debt, you still have to pay it off or you can never offer any debt through US banks or intermediaries ever again (the student loans of international bond markets, if you will). This has the potential to splinter and create a tiered bond market where Italian bonds boughtissued in New York could cost more than those boughtissued in London or Frankfurt because of different laws in different countries.

Where they are traded is not what is causing the problem - it is under what jurisdiction they were issued.  To get a better interest rate on external debt, Argentina issued bonds in the US, denominated in US dollars, under US law.  We don't have much in the way of bankruptcy law for foreign sovereigns, so the courts are kind of making it up as we go along.  In US corporate bankruptcy, there would have been a cram-down provision on the hold outs and this wouldn't be an issue.

Argentina, like Mexico, has learned you don't issue sovereign debt in a foreign jurisdiction the hard way.  But they were attempting to overcome market access issues that were raised because of previous defaults...  without the structure of US law the bonds might not have been marketable, and they wanted (politically needed) growth now, not later.

Not sure where I come out on the whole situation though - on one hand I can see why some just say "you signed up for those rules to get money, pay up" while on the other hand I look at the holdouts and say "Mark to market biatches - them's worth what the renegotiated majority agreed they are worth.  You took a flyer and it isn't paying out how you expected, tough luck".

I don't see how a 3rd party buying out the remaining bond holders work... unless it is the Argentinian central bank paying out foreign reserves and then eventually being made whole by the Argentinian government.  Which triggers that RUFO if it takes place before 2015.

Bad choices for everyone involved.


Well said.  This is a test case for how we need to come up with a better mousetrap when it comes to sovereign debt.   We understand the need to give people and private enterprises the ability to start over, and we give them ample opportunities through bankruptcy and limited liability laws.    We have yet to come up with something similar with sovereign national debt.   It's a balance between not making it too easy to get out of debt obligations so that it encourages irresponsibility and not too hard so that a nation is crippled for decades by long gone obligations.   It's hard to feel sorry for the Argentina of 2001 when they originally defaulted on their debt.   It was a corrupt government that badly overspent and got exposed during fallout of the Brazilian finanical crisis.   Meanwhile, it's hard to feel sorry for the creditors as well.    They were getting rewarded for their risk through high  rates of return.  A creditor rewarded for their risk  can't act surprised of victimized when the risk goes bad.     Argentina has reduced it's debt to GDP ratio by 76% in the last 10 years, but it still can't outrun the sins of the past regimes.  The whole idea of pari passau seems ridiculous and unworkable  to me.
 
2014-07-31 12:53:23 PM  

InmanRoshi: Argentina has reduced it's debt to GDP ratio by 76% in the last 10 years, but it still can't outrun the sins of the past regimes.  The whole idea of pari passau seems ridiculous and unworkable  to me.


Argentina is a fiscal mess. Their GDP is totally artificial as evidenced by real inflation of 25-50% per year in the country.  Of course the official stats say otherwise... oh and they will put you in jail if you publish the real numbers.

They've manipulated their currency by not allowing citizens to purchase other currencies.  Black market dollars now trading at 13:1 compared to 8:1 official.

They've nationalized industries.

The Argentine gov't is beyond corrupt and ineffective.
 
2014-07-31 01:12:35 PM  

InmanRoshi: InmanRoshi: Geotpf: IMHO, one should agree to pay what they owe if they are able.  I totally side with the hedge funds here via this simple logic.

The problem for Argentina is if they worked out a settlement with the 7%, it would immediately nullify the contractual agreements they've worked out with the other 93%.   The 93% could then come after them and get the same sweetened deal that they gave to the 7%, and completely wipeout the country.

Forgot to add, what will ultimately happen is that a group of Argentinian private business and banks who are getting arse raped by rising interest rates from the default will end up buying the off the debt from the hedge fund managers.

I'm hoping the precedent that you can buy defaulted distressed debt for pennies on the dollar and then put the screws to a sovereign country and it's citizens just for the sake of making a 2X or 3X ROI ends sooner rather than later.


If a government won't be able to afford to pay back 100% of it's loans it takes out at 100% of par,  then they shouldn't take out the loans in the first place.
 
2014-07-31 01:28:38 PM  

Geotpf: InmanRoshi: InmanRoshi: Geotpf: IMHO, one should agree to pay what they owe if they are able.  I totally side with the hedge funds here via this simple logic.

The problem for Argentina is if they worked out a settlement with the 7%, it would immediately nullify the contractual agreements they've worked out with the other 93%.   The 93% could then come after them and get the same sweetened deal that they gave to the 7%, and completely wipeout the country.

Forgot to add, what will ultimately happen is that a group of Argentinian private business and banks who are getting arse raped by rising interest rates from the default will end up buying the off the debt from the hedge fund managers.

I'm hoping the precedent that you can buy defaulted distressed debt for pennies on the dollar and then put the screws to a sovereign country and it's citizens just for the sake of making a 2X or 3X ROI ends sooner rather than later.

If a government won't be able to afford to pay back 100% of it's loans it takes out at 100% of par,  then they shouldn't take out the loans in the first place.


You do know a "government" is a monolithic, stagnant entity?
 
2014-07-31 01:46:29 PM  

InmanRoshi: RexTalionis: I can't watch the video but based on what I read about the situation in the other articles, the situation is that Argentina was desperate for money during their economic crisis, so they issued bonds with high returns hoping that bond buyers will infuse them with capital in the short term.

And now that bond buyers bought them and infused them with capital, they want those bond buyers who bailed them out to take 1/3rd of what they bought and blaming the ones who don't agree as being some sort of predatory lender.

Is that the gist of the situation? That's what I'm from it.

Argentina defaulted on their external debt in 2001.....


For all the idiocy, trolls, bizarre in jokes and stupid headlines, it's stuff like this that reminds me why I've given up on most other internet comment sites.  The level of discussion here when at it's best is actually really good- you have so many people from different areas you can get intelligent commentary on just about anything

Or you can get your balls stuck in a chair.  Either one works
 
2014-07-31 03:14:55 PM  

RexTalionis: I can't watch the video but based on what I read about the situation in the other articles, the situation is that Argentina was desperate for money during their economic crisis, so they issued bonds with high returns hoping that bond buyers will infuse them with capital in the short term.

And now that bond buyers bought them and infused them with capital, they want those bond buyers who bailed them out to take 1/3rd of what they bought and blaming the ones who don't agree as being some sort of predatory lender.

Is that the gist of the situation? That's what I'm from it.


Almost. In addition to paying off the bondholders (who I will call group A) who took the deal, they want to give the ones who held out (Group B) 0% and are upset that a US court says that if they pay off group A then they have to pay group B the same percentage.

What I'm wondering is what lamebrain will ever loan them money again after this.
 
2014-07-31 05:38:14 PM  

jjorsett: RexTalionis: I can't watch the video but based on what I read about the situation in the other articles, the situation is that Argentina was desperate for money during their economic crisis, so they issued bonds with high returns hoping that bond buyers will infuse them with capital in the short term.

And now that bond buyers bought them and infused them with capital, they want those bond buyers who bailed them out to take 1/3rd of what they bought and blaming the ones who don't agree as being some sort of predatory lender.

Is that the gist of the situation? That's what I'm from it.

Almost. In addition to paying off the bondholders (who I will call group A) who took the deal, they want to give the ones who held out (Group B) 0% and are upset that a US court says that if they pay off group A then they have to pay group B the same percentage.

What I'm wondering is what lamebrain will ever loan them money again after this.


Argentina's stock market is only up a mere 3800% since their last default in 2001.    A few more defaults and we'll be borrowing from them.
 
Displayed 47 of 47 comments

View Voting Results: Smartest and Funniest


This thread is closed to new comments.

Continue Farking
Submit a Link »
Advertisement
On Twitter





In Other Media


  1. Links are submitted by members of the Fark community.

  2. When community members submit a link, they also write a custom headline for the story.

  3. Other Farkers comment on the links. This is the number of comments. Click here to read them.

  4. Click here to submit a link.

Report