Argentina rejects US ruling over foreign debt repayment

Hm, is this serious for them? Their GDP is about $450 billion.

http://www.bbc.co.uk/news/world-latin-america-20456003

No, I don't think it is. The default happened 11 years ago, these guys basically had a tantrum in response to negotiated settlement offers, and the US court doesn't really have jurisdiction. Everybody already knows about this, so it shouldn't shock the market, and Argentina's ability to borrow is already discounted accordingly.

It's a question of principle. They could easily pay the billion plus change, but they consider it unfair because those who rejected the default would get their money in full - while all that agreed only got 30 per cent. That's an honorable thought. Of course Singer's stance is understandable too.

I wonder, will this finally bring about some changes? If they managed their money with domestic banks they could just give him the finger while the US banks that actually hold their cash and make their payments have to follow the ruling, rendering them basically bankrupt. And when will investors finally realize that one can win and lose at a casino? Now that's a point that should be regulated IMHO... play at your own risk, like everybody else.

I applaud Argentina's move to slap down moral hazard!

Not only do investors sue and expect to be paid in full when they lose; they expect a premium on investments for the risk of losing as well! They sue to achieve a risk premium for no risk, and any court that doesn't slap them down with sanctions isn't a real court.

To elaborate a little: when us little guys invest our pitiful sums and the bank fucks it up, we cannot sue (at least here in Europe). When some super high risk trader like Singer 'invests' to suck bankrupt nations even drier, this happens and millions suffer. It's a discrepancy I really don't like much. I'm not big on regulation but the financial markets need to be tamed. It's not in the interest of anybody except a very few individuals when the taxpayer gets robbed for their profits. There is no trickle down effect since no real world economy is involved.

I wonder how the righties here see it. Freedom at all cost? Is the unrealistic hope that you could theoretically do the same with some luck, talent and unscrupulousness? Did the past few years change your opinion on regulation?

US court in siding with vultures shocker!

In t to it;s he 1940's Argentina was the worlds third largest economy. Thanks to Juan Peron, another fachist elected to power, Argentina has become a third world entity. U. S. to follow? Watch out for your retirement accounts boys and girls, THIS elected 'leader' just may do the same thing here.

They most assuredly were not.

Honestly, they should reject it because 1) the US court has absolutely no standing; we can write what ever laws our little hearts desire but at the end of the day we can't dictate what independent countries do and 2) the ruling is complete bullshit. They've had 12 years and the bonds were refinanced twice since then but the vultures kept refusing all offers and just saying they wanted 100% or nothing. Fine, they got nothing. Next time be willing to negotiate or fuck off.

if it was that easy... i explained the problem above. no US bank can make argentinian transactions now because they are bound by the ruling. lots of assets in US banks, lots of transactions going through there.

All it is doing is harming US banks just to help a few vultures. The law should be changed.

Slightly OT...didn't Argentina seriously consider adopting the U.S. dollar as its official currency some time back?

IIRC they considered pegging to the dollar, which would not be unusual.

Argentina did peg to the dollar, which pretty much directly led to the debt crisis.

It was the abandonment of the peg and the massive devaluation of the Argentine peso, in 2001, that contributed to the debt crisis. The peg itself wasn't the culprit.

Yeah, the right wing government thought about doing that back in the 90's though instead they used an old 19th century currency board in an attempt to keep the local currency at parity with the US Dollar. The result was they couldn't finance their trade deficit while local manufacturing took a noise dive since it was so much less efficient than the US and couldn't compete with a high priced currency.

It caused an economic crisis which Argentina has never really recovered from mainly because the left wing government has insisted on doing one populist blunder after another.

Argentina's recovered just fine. Its GDP has doubled in a decade, with exports up some 400% since devaluation took hold. Can't really ask for better economic recovery than that.

Here's a rather lengthy (I didn't get through the whole thing) paper from the Cato Institute on Argentina's brush with adopting the U.S. dollar. If anyone actually wants to be informed have at it.

They've been back in a debt crisis twice since the late 90's with even the government nationalizing all private pension funds to get cash. It hasn't been all peaches and cream.

Do you have any idea how hard it is to make change in Buenos Aires? Because the metal in the coins is worth more for scrap on the black market than the face value. Even with the recent recovery, inflation is above 9%. That hasn't stopped the Peronist goverment from artificially valuing the exchange rate and cracking down on the (otherwise widespread) usage of dollars. They're more interested in national pride and crying about the Falklands than actually making the economy work.

I think they need to shut the fuck up about the Falklands before they Brits hit them another lick. They are a bunch of dead beats, don't want to pay their bills and want to overtake a people that are happy as they are. If I were the Brits I would let them know that if they touch the Falklands again, Buenos Aries is the next target. They need to get with the program. I am tired of these third world shit holes being in the news.

And it is all the result of absolutely retarded policies. Take for instance the artificial currency controls which prevent people from moving their own money; this resulted in people trying to smuggle cash out of the country to Uruguay. Gee, if they ditched their retarded anti-market policies then they wouldn't have to worry about capital flight but instead of seeing the collapse of the banking and finance system as a warning Kirchner doubled down on the stupid and started nationalizing (without fair compensation) foreign owned companies in the country.

As far as I'm concerned Argentines are so stupid they deserve what they get because they keep voting for absolutely illogical and stupid nonsense. Then they wonder why bad things keep happening to their economy. "I'm upset that grain prices are so high so let's block all grain exports and force farmers to sell the grain locally at below market rates! That can't go wrong, can it?" "Gee, why has domestic production collapsed as farmers switched to other crops which they could actually sell for a profit?"

What I want to know is, should I cry for Argentina?

http://www.bbc.co.uk/news/business-20521007

It looks like Argentina will default on those old bonds. It's credit rating is, once again, getting hammered but it really is the only realistic thing.

Sad thing is that if Argentina could get it's act together it could be a strong country.

As long as politicians more interested in setting themselves into power for life infects Argentina like the cancer it is it will get no better.....

People have been saying that about Argentina for the last century are it's low population and relatively large land area but the fact remains they keep screwing it up with bad policies. Kirchner is a 'tard even according to left wing sources. I mean everyone knows that when you nationalize foreign companies without fair compensation then that will depress foreign investment just like when you outlaw exports to keep domestic prices low (as Argentina did with farm products) then you depress even domestic production of farm goods.

Kirchner is a populist idiot just as Argentine voters are fucking fools who, apparently, not suffered enough to bother with enacting sound government policies. They remind me of the current Republican leadership in their desire to ignore facts which they don't like. All government police should be fact based because that tends to produce better police and better results.

Argentina had a higher standard of living than the US in 1890. Mexico did at one point, too.

I think there is a joke down there that God gave Argentina every advantage in the world then evened things up by filling it with Argentines...

I find either of those points--but especially the latter--difficult to believe.