Killing one person is murder, killing 100,000 is foreign policy
A default doesn't benefit a creditor. They are most likely pushing for some payment.And you have to remember this is not recent debt, but debt taken up decades ago and the economy has recovered relatively speaking and these 7% hedge funds are now deliberately pushing for a default.
The Argentine President appears to be breaking down under stress. She may be correct that the U.S. government hopes that her government falls, but U.S. political preferences are not the same thing as planning to topple a government, much less to cause "something" to happen to another leader. IMO, such rhetoric diverts from an issue on which she has a legitimate argument (as do the hedge funds).
How to reconcile the differences between the parties is key. Ultimately, some kind of compromise would offer the best chance to end the dispute. Imposition is not helpful and the Judge's ruling has made it less likely that there will be a settlement, as he has hardened the differences and pushed Argentina into technical default with Argentina incurring costs.
Going back to the Argentine President, her legitimate grounds are that a U.S. judge is acting in a fashion that has:
1. Violated Argentina's sovereignty.
2. Created a situation of technical default for Argentina.
3. Inflicted economic and reputational costs on Argentina that would not otherwise have occurred.
Her best strategy would entail:
1. Focusing on the sovereignty argument in making her case. That argument drew considerable sympathy at the UN General Assembly session, including from some European and Asian countries.
2. Use the Bank for International Settlements or some other international institution as the mechanism for making payments, as international institutions would fall outside the U.S. judge's purview and there would be a far higher probability that Argentina's debt payments would reach their creditors. The Judge might well try to order the creditors not to accept the payments, but such a ruling might not be legally sustainable. More importantly for Argentina, such a ruling could not place it in technical default.
3. Work to create bilateral payments agreements and facilities with the numeorus countries (including a European and Asian ones) that were sympathetic to her position at the UN to begin rebuilding access to global financial markets on a country-to-country basis.
4. Leave open the option for the hedge funds to obtain the same terms all the other creditors can attain, though she could suggest that their payments would be net of legal charges Argentina has incurred on account of their actions.
5. As the UN General Assembly for a vote to seek an advisory opinion from the International Court of Justice (a binding ruling would not be feasible, as the U.S. will not agree to an International Court of Justice case to resolve the affair for complex reasons that include U.S. sovereignty with respect to its judicial system and its backing the hedge funds in question).
All said, she's not in an unsalvageable position. Her fearful rhetoric has not helped her case.
Last edited by Van Basten; 10-03-14 at 08:05 AM.
"I am not among those who fear the people. They and not the rich, are our dependence for continued freedom." -- Thomas Jefferson, 1816 "[F]acts are before ideas." -- Mikhail Bakunin, 1882
No that debt defaulted long ago.What caused this mess is the Argentine government with their military dictatorships that ran up huge amounts of debt.
Bull****. It wont impact them at all and has nothing to do with survival. If it did, then it would take the deal because at least it would get something. What these funds are doing now, is pushing the country into default, meaning everyone will lose except those that bought insurance against default...It is not about greed, it is about survival, a hedge that loses 70% of their holdings will not be in business for long.
Sigh you have no idea what you are talking about.Argentina has never fully recovered. They have been locked out of financial markets because they chose to default like a bunch of deadbeats. If you break the rules then expect markets to push back.
Bull****. Their motivation is greed and always has been. They stand to make more in letting Argentina default on a minor part of their debt than taking a haircut.. that is all this is about.Their motivation is that Argentina will hopefully live up to their commitments and pay their debts in full just like everybody else.
LOL since when? You have heard of CDS right? If the hedge funds have taken out such, which is very likely, then they stand to lose pretty much nothing. Sure it screws over millions of people and only benefits the few rich who invest in the hedge fund, but hey it is "business" no?A default doesn't benefit a creditor. They are most likely pushing for some payment.
I'm just waiting for PeteEU to show up and explain why it all makes total sense because of the innate evil at the core of America.
Edit: Haha, I missed it.
And they have been locked out of the markets ever since and have never recovered. So please, spare me the socialist BS. The Argentines have been intervening in every single aspect of their economy and have not curtailed their spending habits thereby continually destroying their economy- its pretty much what happened to Greece and a lot of the other EU countries.No that debt defaulted long ago.
If there was any insurance they would have used it. There is no such insurance against government default.Bull****. It wont impact them at all and has nothing to do with survival. If it did, then it would take the deal because at least it would get something. What these funds are doing now, is pushing the country into default, meaning everyone will lose except those that bought insurance against default...
Wrong. If Argentina wants to return access to the world financial markets then they have to pay their debts just like all the other nations of the world. Who gives Argentina the right to default and not have to pay off debts? Nobody.Bull****. Their motivation is greed and always has been. They stand to make more in letting Argentina default on a minor part of their debt than taking a haircut.. that is all this is about.