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Thread: US could topple my government, kill me: Argentina's Kirchner

  1. #41
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    Re: US could topple my government, kill me: Argentina's Kirchner

    Quote Originally Posted by PoS View Post
    Your definition of hedge funds as predators falls right in line with the Argentine president's. Youre pretty much agreeing with her that it was illegal for them to do it. Typical socialist nonsense.
    Kirschner is unquestionably wrong in accusing the US government of trying to take down Argentina. She's obviously trying to distract the public from Argentina's problems, many of which they made for themselves.

    That doesn't change the fact that Aurelius is unquestionably acting in a hostile and predatory manner.

    This is not the first time in history that a sovereign nation has defaulted on its debts. As far as I know, it is the first time that an entire nation was bent over a barrel by a private entity who bought up the nation's debts.


    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.
    Not so much. No one seems to be screwing over Greece in order to trigger credit default swap payouts.

    In addition, while government spending has been slowly growing, the debt-to-GDP ratio has dropped significantly since 2003.




    If there was any insurance they would have used it. There is no such insurance against government default.
    Yes, there is. It's called a "credit default swap."

    CDS's are part insurance, part bet, part hedge. They are triggered when a particular debt instrument or arrangement defaults. Neither the issuer nor purchaser of a CDS needs any financial involvement whatsoever to buy one.

    It's been around for over 10 years, and it's what got AIG into such big trouble. AIG issued CDSs on CDOs and MBSs for years, and as long as they were solvent, AIG was collecting huge fees. When people started defaulting on loans, AIG was forced to pay out more and more, until it drove them bankrupt. The US government stepped in and made the purchasers of the CDSs whole, which helped prevent the global financial system from melting down. It turns out that Goldman Sachs was a big holder of CDSs at AIG, so they were basically betting against derivatives that they were selling to their customers.

    And yes, it is fairly likely that Aurelius et al have purchased CDSs on Argentine debt. Even if they don't have a plan to intentionally push Argentina to a second default, that would be a prudent move.


    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.
    Erm... Actually, that's what a default actually is. You owe money, you can't pay, you offer to pay back a portion of your debts.

    In turn, once a nation defaults, no one is obligated (legally or morally) to make any loans. Any such lenders do so at their own risk.

    That's how it works. Are you genuinely not aware of this process?

  2. #42
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    Re: US could topple my government, kill me: Argentina's Kirchner

    Quote Originally Posted by PeteEU View Post
    I dont care if they are American, British, French or Spanish... it is irrelevant. It is their actions that is the problem.
    Its pretty relevant when you reserve your venom only for Americans and their businesses, youve been at this for years. And no, their actions are not the problem, these firms are out to make a profit and they will do whatever they can to make it so, that is what capitalism is about. If you dont like it then go to Venezuela, North Korea or Cuba.

    First off she aint a socialist per say, and certainly not Chavez like.
    Really? Her government basically enforces import curbs, price controls, multiple currency exchanges just like Venezuela does.

    Secondly by pushing for a default then what will happen? Total economic crash and social upheaval. Is that what you want, to throw millions of people on the fire just so a few greedy bankers can get their money via their insurance?
    They already defaulted. Again. Havent you heard the news?

    I have no doubt that things have to change in Argentina, but those changes aint gonna happen if the country is being held at ransom by a few bankers while the rest of the planet want to help them.. and that is exactly what we are talking about. They cant make any reforms or get outside investment or anything like that BECAUSE of these greedy bankers.
    Youre wrong. They can make these reforms and if they do them then IMF can finally step in with a bailout package but Kirchner is too stubborn to curtail government spending and cutting subsidies so that means capital flight will continue and the economy will keep contracting because there is no revenue.

    Let's face it, these hedge funds only own about $1.7 Billion in credit that they want paid off, Argentina's reserves are around $25-28 Billion so they can pay them off if they want to, the problem is that they just dont want to.

  3. #43
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    Re: US could topple my government, kill me: Argentina's Kirchner

    Quote Originally Posted by PoS View Post
    And no, their actions are not the problem, these firms are out to make a profit and they will do whatever they can to make it so, that is what capitalism is about....
    Capitalism shouldn't be about making a profit with no regard for the welfare of an entire nation.


    Youre wrong. They can make these reforms and if they do them then IMF can finally step in....
    Oh? And in how many cases has the IMF or World Bank actually helped out, when a nation has its back to the wall?

    Unfortunately, in most cases it fails, in part because these agencies push for a kind of austerity and right-leaning solutions that make things worse. Argentina took IMF aid and advice in 1999, including cutting spending, increasing government revenues, encouraging foreign investment, and liberalizing labor laws. By 2001 the economy was a disaster, and the IMF was pushing Argentina to pay off foreign debts instead of take care of domestic problems. The resulting peso devaluations caused more problems, including capital flight and widespread unrest.

    In other words, the IMF ****ed up Argentina so badly that by 2004, Argentina realized that default was a better alternative than taking IMF funds and following their policies.


    Let's face it, these hedge funds only own about $1.7 Billion in credit that they want paid off
    Try $15 billion. And no, it really is not a good thing to lose half their reserves.

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    Re: US could topple my government, kill me: Argentina's Kirchner

    Quote Originally Posted by Visbek View Post
    Capitalism shouldn't be about making a profit with no regard for the welfare of an entire nation.
    .
    If you dont like capitalism you can always emigrate to Cuba, North Korea or Venezuela.

    Oh? And in how many cases has the IMF or World Bank actually helped out, when a nation has its back to the wall?
    Argentina has no choice because nobody else wants to help them them (and for good reason).

    Argentina took IMF aid and advice in 1999, including cutting spending, increasing government revenues, encouraging foreign investment, and liberalizing labor laws. By 2001 the economy was a disaster, and the IMF was pushing Argentina to pay off foreign debts instead of take care of domestic problems. The resulting peso devaluations caused more problems, including capital flight and widespread unrest.
    Wrong. They barely enacted those reforms you mentioned and pretty much stopped them altogether and then went back to meddling with the economy, just like all Keynesians and socialists do, so when the IMF saw that they stopped supporting the country.

    How Argentina Got Into This Mess | Cato Institute

    In other words, the IMF ****ed up Argentina so badly that by 2004, Argentina realized that default was a better alternative than taking IMF funds and following their policies.
    A very clueless statement. Argentina never made any lasting reforms and continued their corruption and manipulation of the economy until it blew up on them, then they all of a sudden decided to thumb their nose at the world and defaulted because they didnt want to pay what they owed and then expected everybody else to accept their terms- sorry, but only the sycophants ever agreed to it and Im glad that the two hedge funds fought them back.

    Try $15 billion. And no, it really is not a good thing to lose half their reserves.
    Wrong again.

    http://dealbook.nytimes.com/2014/07/...elentless-foe/

    Elliott and other investors are now seeking more than $1.5 billion, which includes years of unpaid interest.

  5. #45
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    Re: US could topple my government, kill me: Argentina's Kirchner

    Quote Originally Posted by PoS View Post
    If you dont like capitalism you can always emigrate to Cuba, North Korea or Venezuela.
    Thanks for the fallacious thinking (specifically, false dilemma)

    I did not say "capitalism is evil." I said "capitalism should not be about bankrupting sovereign nations." There are plenty of other ways for a hedge fund to profit without deliberately forcing a nation to default.


    Argentina has no choice because nobody else wants to help them them (and for good reason).
    You didn't read my question. Here it is again.

    How many times has IMF intervention actually made a situation better? What's their track record?


    Wrong. They barely enacted those reforms you mentioned and pretty much stopped them altogether and then went back to meddling with the economy, just like all Keynesians and socialists do, so when the IMF saw that they stopped supporting the country.
    Uh, no. Argentina deliberately refused further IMF assistance. IMF and bond holders were pushing it towards austerity, which would have crippled growth (as we've seen with many European nations recently). As it was, IMF requirements pushed them towards devaluing the peso, which caused an economic disaster.

    There's no question that many of Argentina's problems were created by various Argentine governments, with varying degrees of legitimacy. But it doesn't look like the IMF did much to help, because they're focused on repaying foreign creditors rather than fixing economies.


    Argentina never made any lasting reforms and continued their corruption and manipulation of the economy until it blew up on them, then they all of a sudden decided to thumb their nose at the world and defaulted because they didnt want to pay what they owed and then expected everybody else to accept their terms- sorry, but only the sycophants ever agreed to it and Im glad that the two hedge funds fought them back.
    Why? What have those hedge funds done to improve the economy of Argentina?

    They aren't helping any of the other creditors, because their intransigency holds up payments to all the creditors. They aren't helping the economy of Argentina, which will tank if it undergoes the "reforms" you want. They certainly aren't helping the citizens of Argentina, by stripping the nation of its reserves and keeping it in economic turmoil.


    Wrong again.
    I must admit, I was wrong. Argentina doesn't owe $15 billion. They're on the hook for about $100 billion if they do what the hedge funds demand.

    Long story short: Their current agreements require them to treat all bondholders equally. While RUFO is active, if they pay the NLM group in full (as NLM demands), they will be required to make all of the bondholders whole, to the tune of $100 million (or 3 times their reserves). They were trying to pay some of the bonds, but the US court blocked them because, again, the agreement requires them to treat all creditors equally.

    So even if they want to pay off the $1.5 billion to the holdouts, doing so would trigger a debt obligation they can't possibly afford. Hence they've been trying to wait out RUFO, which expires at the end of 2014.

    Obviously it's much more complex than this capsule explanation. And I'm not saying that Argentina are the "good guys" or can do no wrong. I've already explicitly stated that Kirschner's attempts to blame the US government and scare her constituents is wrong, and not helping. They also apparently made some very poor and/or short-sighted arrangements with the original default.

    By the same token, the hedge funds are certainly not the White Knights of Capitalism. They're screwing over an entire nation and all the other creditors, because they won't take a haircut like all the other bondholders, on loans they purchased long after the initial default, for around 10 on the dollar. They could take the same deal as everyone else, and still profit, especially if they bought a bunch of CDSs on their investment (which is almost certainly the case).

    So in this particular case: Screw the hedge funds. They can still make a profit without keeping Argentina in turmoil. And it's not their job to teach Argentina a lesson, or to force Argentina to change its fiscal policies.

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    Re: US could topple my government, kill me: Argentina's Kirchner

    Quote Originally Posted by aseidner View Post
    What a paranoid fool.
    No, she just remembers Chavez.

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