Argentina says will pay all creditors in Buenos Aires

[Judi Lynn]

Source: Channel News Asia

Argentina says will pay all creditors in Buenos Aires
POSTED: 21 Aug 2014 02:09

BUENOS AIRES: Argentina said on Wednesday (Aug 20) it will pay all its creditors in Buenos Aires, seeking to circumvent a US court order barring it from repaying the debt it restructured after its 2001 default.

The move aims to work around US District Court Judge Thomas Griesa's ruling in favor of two "holdout" creditors refusing to accept a write-down on their bonds, which has blocked Argentina from servicing its restructured debt and forced it into a new default.

But it is unlikely to resolve the country's dispute with the two hedge funds that took it to court for US$1.3 billion (S$1.6 billion), NML Capital and Aurelius Capital Management, which Argentina calls "vulture funds."

The announcement comes after President Cristina Kirchner said on Tuesday that Argentina was replacing Bank of New York Mellon, the bank responsible for transferring its debt payments to creditors, with the Argentine state-run Banco Nacion Trust.

Read more: http://www.channelnewsasia.com/news/business/international/argentina-says-will-pay/1322452.html

[Fred Sanders]

1. Touché. You vultures want your red meat, fly down to Buenos Aires and get it.

[Louisiana1976]

16. And when the vultures arrive in Buenos Aires they could be introduced to the inside of an

Argentinian prison.

[EX500rider]

2. Contempt?

However, analysts said the move dashed hopes that Argentina could strike a deal with the hedge funds demanding full payment and allow the country to move out of default and return to global capital markets.

It was also unclear whether Argentina could sidestep the US court's ruling. Alejo Costa, strategy chief at investment bank Puente in Buenos Aires, said: "Argentina could end up in contempt."

There are also fears that dragging out the debt crisis could worsen Argentina's recession and further weaken the peso.

Unemployment rose to 7.5% in the second quarter as consumer spending and industrial output both fell.

http://www.bbc.com/news/business-28863991

[Cicada]

3. Maybe NY court will levy Argentine assets in USA

I think the court will not roll over

[JackRiddler]

4. Argentina should retaliate.

Bet there are more U.S. assets in Argentina. The court is engaging in outrageous interference on behalf of mother-fucking barbarian plunderers who should be sentenced to hang, every one of them, for their attempt to starve a nation.

[The Magistrate]

12. I Agree Completely, Sir

The vultures should not get a dime, not even the pennies on the dollar they paid for the bogus paper, the court is so out of line that to be in contempt of it is a duty, not a crime, and if the court attempts any levy on Argentine assets in the U.S., U.S. property in Argentina should be seized.

[alcibiades_mystery]

13. Tell us how you really feel

[Louisiana1976]

14. Exactly. Argentina should tell the "barbarian plunderers" to pound sand.

[bemildred]

19. +1. nt

[Morganfleeman]

5. Cry me a river

Argentina voluntarily CHOSE to subject itself to New York law specifically BECAUSE it gave bondholders assurance of disputes being subjected to New York law and because it gave them access to better rates than would be available to a bond issued under domestic law.

To cry and moan now is laughable. And assets of theirs will be forever subject to seizure and attachment.

[JackRiddler]

10. Make those people starve!

How can anyone justify this? Such empty rationalizations, for the morality of the cannibal.

Do you get a cut of this? Do you just identify with this crap from a far? In some ways the latter would be worse. Shame on you.

Some already rich motherfuckers who bought bonds for pennies on the dollar after the deal are trying to burn a country down for their own profit. Nothing more. Vultures on the outside of the deal discovered a loophole they could exploit to fuck a country and starve its people for their own profit. That's noble! That's the market at work in producing more efficient solutions.

If you could burn the entire planet to get a yield a point above S&P, that is your fucking duty. Kill the poor! They should have had a better contract lawyer! Capitalist morality.

[Louisiana1976]

15. That's right. What the vultures want to do to Argentina is financial rape. It's capitalism at its

worst.

[bemildred]

20. And the vulture funds VOLUTARILY chose to buy those very discounted Argentine bonds. nt

[griloco]

40. maybe their assets will and maybe they won't

https://www.gov.uk/government/news/government-acts-to-halt-profiteering-on-third-world-debt-within-the-uk

[quadrature]

6. Cristina's bag of tricks is empty

or maybe not, what can she do to sell bonds?
.............................
lets review history.

Argentina sells peso bonds. -->
inflation wipes out value of peso -->
nobody now buys Arg bonds

................trick #2 ...............
Arg sells bonds denominated in US dollars.
Arg defaults
nobody now buys Arg bonds

............. trick #3 .................
Arg sells dollar bonds with contract that says
a US court will have jurisdiction -->
Arg defaults -->
Arg tells US court to f*** off -->
nobody now buys Arg bonds

I give up, what next

[JackRiddler]

11. Expropriate U.S. assets.

War is war.

[FrodosPet]

25. That worked out so well for Cuba

Facing that possibility, if I owned assets down there that was about to be expropriated, I would either get them out of there or make them useless to Argentina.

So what will happen if no one wants to do business with them in the future, because they are afraid of having their assets expropriated or of never being repaid?

I guess there is the Juche Idea - self reliance.

[Judi Lynn]

34. Landowners from other countries already took compensation offers from Cuba long ago.

Only U.S. owners refused to accept the offers made to them while owners in Canada, Europe, Latin America, etc. settled decades ago.

More on the subject:

The US Blockade of Cuba: Its Effects and Global Consequences
Nicholas Partyka I Geopolitics I Analysis I May 2nd, 2014

~snip~

It is not possible to discuss almost any aspect of life in Cuba without talking about the US blockade of the island. That the US has an 'embargo' against the island is one of the few things that Americans might know about Cuba. This policy of economic warfare against our hemispheric neighbor has been in place for more than five decades now. In this dispatch, I want to focus on the US blockade policy. We will look briefly at why it exists, its aims, its status under international law, and what its main effects are. Though many Americans may know that there is an "embargo" (though "blockade" is more accurate), few likely know how it works and what its costs are. Attempting to remedy this situation will be the point of this part of the series.

On New Year's Eve 1958, Fulgencio Batista fled Cuba. The next day, the revolutionary government took control of the country. For the better part of a year, the US foreign policy establishment did not know what to make of Fidel Castro and his revolution. Relations remained cordial until Fidel announced the implementation of a set of Agrarian Reform laws. These laws aimed to put land in the hands of poor farmers who had been largely excluded from land ownership under the old regime. Many of the lands nationalized under Fidel's measures belonged to US citizens or companies; e.g. King Ranch. Other nations also had property nationalized in Cuba in the wake of the revolution, but only the US refused compensation, which the Cubans offered.

In a somewhat ironic twist, the Cubans offered compensation for nationalized property on the basis of the property's value as determined by the most recent pre-revolutionary Cuban tax assessments. Now, this would only be a problem for US owners of Cuban property to be nationalized if those owners felt that there was too large a discrepancy between the value of the compensation offered and the market value of that property. This kind of situation would be likely to come about if US owners had massively underreported the value of their Cuban property to Cuban tax officials (perhaps with official blessing of the regime at the time). The response of the US to these compensation matters also has nothing to do with the fact that the then-sitting CIA Director, Allen Dulles, sat on the Board of Directors for at least one large US firm to have property nationalized in Cuba, namely the infamous United Fruit Company.

Before the revolution, underreporting taxable value saved money in taxes and thus put more of it back in the owner's pocket. After the revolution however, this meant that those owners would lose out in a compensation package offered by the new Cuban government as the value of the compensation offered would be substantially less than what the property would be worth on the market. US owners of Cuban property wanted to both receive the real value of their property, but also not thereby tacitly admit what Castro and the Cuban revolution had accused them of, namely taking advantage of Cuba and Cubans for their own private gain. This is a classic example of one not being able to have one's cake and eat it too. The refusal of the US to acknowledge this had lead to the lion's share of the trials and tribulations that have arisen as the US and Cuba attempt to normalize relations.

More:
http://www.hamptoninstitution.org/cuba-project-part-two.html#.U3lxZmcU9Ms

[JackRiddler]

35. A lot better than what would have happened...

If the U.S. government had succeeded in perpetrating on Cuba the same treatment as it did on Guatemala, El Salvador, Nicaragua, Honduras...

It's simple: If a U.S. court steals Argentinean assets to meet the criminal demands of these vulture hijack artists, Argentina should retaliate by seizing equivalent U.S. assets.

As for "no one," that's a lot of capitalist blah blah. Argentina was doing very well following its default - an example for the world. Maybe one reason why these libertarian fanatic pirates decided to pull their murderous stunt.

The vultures are mass criminals, as bad as any of the murderers who appear on the front pages of the tabloids except they're trying to kill a nation. Stop making excuses for them.

[bemildred]

21. Sounds like nothing much changed. nt

[Judi Lynn]

7. Earlier story posted at D.U.: US Council of Foreign Affairs supports Argentina, blasts Judge Griesa

Thursday, June 26th 2014 - 05:12 UTC

US Council of Foreign Affairs supports Argentina, blasts Judge Griesa


The Council on Foreign Relations, one of the most influential private organizations in US Foreign Policy, questioned the US Supreme Court for rejecting Argentina’s appeal in its legal dispute with the so-called vulture funds, saying the ruling will “diminish national sovereignty” and “upend international finance”.

In a highly critical article published in its renowned Foreign Affairs magazine and signed by Felix Salmon, the Council bashes both the US Supreme Court’s decision and Judge Thomas Griesa’s previous ruling, describing them as “dangerous fundamentalism”.

“The consequences are certain to be dreadful for Argentina. More broadly, the ruling will make it more difficult for countries to free themselves from the burden of over-indebtedness. It will be very bad for international capital markets. Oh -- and it will also diminish national sovereignty,” it reads.

Salmon focuses on the effects of the rulings on international finances, saying the Supreme Court’s decision “leaves open the questions of sovereign immunity, the future of sovereign debt restructuring, and the future of New York as a financial center”.

In tune with Argentina’s stance, the article states that “if a country does default on debts, then it needs some way to cure that default Because countries can’t declare bankruptcy, exchange offers are the next best thing. But for those to work, a debtor country needs to be able to pay the exchange bondholders without paying the holdouts. Otherwise, no one would ever participate in an exchange, and no country could ever restructure its debts”.

More:
http://en.mercopress.com/2014/06/26/us-council-of-foreign-affairs-supports-argentina-blasts-judge-griesa

[Morganfleeman]

8. This is baloney of the highest order

The Supreme Court decision was broad-based with all but Ginsburg agreeing and Sotomayor recusing herself.

There is a solution to this problem. A country has a clear prerogative to issue domestic currency bonds under local law. Why don't they do so?

Because most investors would not touch these emerging markets bonds with a bargepole BUT FOR the protection of New York law. The overwhelming majority of investors in emerging market debt are not vulture funds, but sovereign wealth funds, U.S. and international pension funds and bond funds and endowments. These investors are going to demand a much higher rate of return from serial defaulters like Argentina if they are buying into local law debt, because these investors are potentially subject to cramdown should said sovereign decide it no longer wants to pay its debts.

Countries with poor credit ratings like issuing under New York law because it gives them better access to capital markets and a wider pool of investors. That is fact, otherwise they wouldn't do it. They certainly don't HAVE to subject themselves to New York law. The hallmark of sovereignty IS that freedom to decide what jurisdiction a country will issue bonds in.

Argentina was happy to accept the benefits of issuing under New York law at the time they issued, and they should accept the consequences. Rest assured that any future bonds Argentina issues under Argentine law will carry a much higher premium than its New York law bonds.

[Adrahil]

9. Hmmm... That's borderline delusional.

Look, the reality is that Argentina is busted. The bond holders should accept that. But.... the fault here is with Argentina. You can't keep asking to borrow money and expect to be able to do it when every time, you wind up telling the bond holders to fuck off, even when you've you've promised, in writing, to submit to the jurisdiction of a foreign court.

Argentina needs to:

1) quit making unrealistic promises about bond payments.

2) never cede national sovereignty

3) pay it's bills so people will actually lend them money

[Fred Sanders]

17. Argentina is not broke, how did you conjure that up? The Council may know more about it than you

or I.

Defending vulture capitalists is done on many other sites.

[JackRiddler]

18. Vultures are mass rapists.

It's stunning that people who gain NOTHING from this crime, but who just watch this shit on CNBC or whatever, actually believe in the ideology so completely that they convince themselves Singer et al. are engaging in moral and admirable behavior.

Maybe it's not so stunning? After all, kings and conquerors have in their own times been celebrated for conducting massacres and genocides, etc. Columbus still has a federal holiday. Quite a few living war criminals are openly celebrated.

Of course, the vultures themselves KNOW otherwise. They can't afford to believe in Friedman-Rand fairy tales. They know there's profit in burning down cities, poisoning oceans, clear-cutting forests, so they do whatever it takes: why not make it by forcing starvation on some Argentineans you don't know? You'll never have to see them!

And what this really shows is that capitalism has run out of tricks and is only left with returning to its origins in the moral equivalent of cannibalism. This is how it "grows." Capitalism has nothing left to offer, it will continue descending into ever-worse moral depravity.

[quadrature]

22. so how much payment(by Argentina) is enough?

a penny on the dollar
ten
thirty?

[bemildred]

23. That seems to be what is in dispute. nt

[The Magistrate]

24. And What Is Not In Dispute, Sir, Is What A Great Majority Of The Bond-Holders Agreed To Accept

And then these penny on a dollar grifters horn in and try and cash in. If they were original creditors I might regard them a little more kindly, but they are mere bottom-feeders, and need to be kicked rather than fed. Ruining restructurings agreed to by actual lenders is massively destructive to the workings of the financial markets, and to the prospects of a great many countries in the world laboring under consequences of foolish decisions of past regimes.

[bemildred]

26. You must know I agree, Sir.

Just explaining that to answer that question is what the dispute is about, hence ones answer would put one on a side in the dispute, but would not help resolve it.

[The Magistrate]

28. I Understand, Sir

But I am amazed anyone posting here does not, and took your comment as a convenient point off which to kick....

[bemildred]

29. So you did, Sir.

[quadrature]

32. 'paid in Buenos Aires' is misleading headline, better would be NOT paid

the full amount, and on top of that,
Argentina says,
US court, go eff yourself

[The Magistrate]

33. Indeed, Sir: Not Paid The Full Amount

Paid an amount agreed on by negotiation, and the U.S. court ought, indeed, to be told to go fuck itself, and without grease to boot. The vultures who purchased paper at pennies on the dollar as a speculation should not even get those pennies back.

[griloco]

38. BRICS will lend them money. the waning of the west?

BRICS establish $100bn bank and currency pool to cut out Western dominance
July 15, 2014 18:14

The big launch of the BRICS bank is seen as a first step to break the dominance of the US dollar in global trade, as well as dollar-backed institutions such as the International Monetary Fund (IMF) and the World Bank, both US-based institutions BRICS countries have little influence within.


http://rt.com/business/173008-brics-bank-currency-pool/

UPDATE 1-China lends Argentina $7.5 billion for power, rail projects
Fri Jul 18, 2014 9:27pm EDT

http://www.reuters.com/article/2014/07/19/argentina-china-idUSL2N0PT2N220140719

[Travis_0004]

27. their country, their rules

Lets just hope they dont need money in the future and wonder why nobody will loan them any.

[christx30]

31. I know if I was

running a retirement that bought bonds, I would never buy any from Argentina. Two years later they would be totally worthless.

[griloco]

37. yur a bit behind the times

BRICS establish $100bn bank and currency pool to cut out Western dominance
July 15, 2014 18:14

http://rt.com/business/173008-brics-bank-currency-pool/

UPDATE 1-China lends Argentina $7.5 billion for power, rail projects
Fri Jul 18, 2014 9:27pm EDT

http://www.reuters.com/article/2014/07/19/argentina-china-idUSL2N0PT2N220140719

[riqster]

30. Two creditors tried to fuck over an entire country, and other creditors to boot.

They deserve a boot. Right in their...bank accounts, yeah, that's it, a boot in their bank accounts.

[Judi Lynn]

36. Nobel Prize Winner Sides With Argentina Over Debt Swap Issue

Nobel Prize Winner Sides With Argentina Over Debt Swap Issue

BUENOS AIRES, Aug 24 (BERNAMA- NNN-MERCOPRESS) -- Nobel Economics laureate Joseph Stiglitz considers the Argentine government's move to reopen the debt swap and replace the Bank of New York Mellon with local bank Banco Nacion as a "good call".

"If I have an asset and want to voluntarily change it for another asset, I don't see why not. It is the basis of the economy," Stiglitz explained as he questioned the position by US District Court Judge Thomas Griesa in the legal dispute.

"From a global perspective, it is not possible to understand why a magistrate gets to have the right to judge about any bond in the world. Extraterritoriality should be unacceptable," the university professor at the Columbia Business School said.

In an interview published here, Stiglitz said that debt restructurings are "in general" followed by a "rapid" return to international markets.

More:
http://www.bernama.com/bernama/v7/wn/newsworld.php?id=1062871

[hack89]

39. Argentina specifically gave that NY magistrate the power to judge their bonds

It was the only way anyone would buy them.

[Calista241]

41. Queue new Falklands crisis in 3...2...

N/t