Posted on 06/18/2014 12:51:08 PM PDT by PoloSec
Argentinians, battered by decades of apparently cyclical economic crises, fear a new one following a US supreme court ruling this week that could make the country liable for up to $15bn (£11bn) owed to so-called "vulture funds".
The vultures, led by a US billionaire, are mainly hedge fund investors who snapped up Argentinian bonds at rock-bottom prices following the country's $95bn default on its foreign debt in 2001. The court in Washington DC has ordered that they be repaid in full – and that ruling threatens a new default, possibly within weeks.
Violence erupted across the nation after Argentina declared itself unable to meet its payments in the last week of December 2001. The widespread rioting, supermarket looting and the death of young social volunteers by police fire took their toll on Ochoa. "That's when I had my first panic attacks, which completely affected my life afterwards and even today."
Argentina had lived through hyperinflation up to 12,000% in 1989. There had been economic collapse in 1975 and decades of military rule. But what happened in 2002 was unique, even in comparison to those catastrophes. Bank accounts were frozen and withdrawals banned. Barter clubs sprouted like mushrooms after rain everywhere. Old clothes were exchanged for vegetables, psychology sessions for cuts of meat.
"The 2001 crisis hit me with four kids already," recalls Ochoa. "I met with the parents of other kids outside school to locate nearby barter clubs, count our coins to get there and find whatever we could find, but something at least."
Like many other workers and employees, journalist Italo Daffra found himself thrown out of his job. "I went through an enforced sabbatical in 2002 and 2003," Daffra says. "I was the editor of three magazines and our publisher crashed overnight. I burnt through all my savings
(Excerpt) Read more at theguardian.com ...
But socialism is awesome. The people who say they are smarter than me said so.
The rhetoric of these Argentina stories is disgusting.
I thought they basically declared bankruptcy and reorganized. This was fought in a US court? Why not in an Argentine court? Why do they need to comply with a court ruling in another country? (Unless the bonds were sold on that basis?)
“Over 10 years have gone by but nothing makes us suppose our political class have learned anything from what happened. Their arrogance and our classical apathy create a lethal combination for it to repeat itself all over again.”
Yep, & sooner or later we will suffer the same for the same reasons.
Argentina’s economic history is strong evidence that we should take the pronouncements of her senile clerics seriously.
so, if country One bails out country Two, when it comes time to pay, country One is a ‘vulture’ ? But if country One refuses to bail out country Two, then country One is ‘greedy and inhumane’. Decisions, decisions...
It’s a bit complicated but if you really want to know:
http://dealbook.nytimes.com/2014/02/25/argentina-takes-its-debt-case-to-the-u-s-supreme-court/?_php=true&_type=blogs&_r=0
A friend’s daughter, who grew up in a conservative Southern environment and was a quiet, respectful conservative herself, went to graduate school at an elite Ivy League school. While there, she married a native Argentinian. She is now a rabid leftist and some of her family members can’t believe some of the garbage she spews. She believes socialism works well in most places, but having all the answers herself, she forecloses the opportunity for anyone to rebut her point of view. You would think she and her husband would learn something from his home country’s travails. It really hurt me when this girl swallowed the manure pile whole.
I would like to pick “Don’t loan money to an habitual deadbeat for $100,” Alex.
Their willingness to fund an insolvent county's sovereign debt allowed at least some of the assets to be saved. Now the Argentinians are calling the people who salvaged their miserable country "vultures."
The Argentinians never learn. Several years ago, they decided to nationalize their country's oil reserves, in effect stealing tens of billions of dollars from petrochemical companies that had invested in Argentina. Now they wonder why foreign investment is so difficult to attract.
Actions have consequences, and markets remember.
The governing law of the bonds they sold was New York law.
They would not have been able to sell the bonds otherwise.
They agreed to abide by the law of the contract.
They need to comply with the US court ruling if they ever want to borrow money on the global market again.
Small correction: the trades are executed under the laws of the State of New York. My opening statement makes it sound like the bond contracts were written under USC.
And people call America arrogant.
Socialism is like crack cocaine.
Once you start, you cannot stop..........................
These “vultures” are never going to be repaid.
Argentina is a sovereign nation and there is no way to force them to repay, short of military occupation (right, like THAT will happen).
By trying to force a moot issue they are just going to make Argentina the object of sympathy in all of these other developing nations, and encourage the spread of more Communism. By playing right in to Commie rhetoric that Uncle Sam is nothing but a bill collector for EEEEEEVIL GRRRRRREEEEDY bankers.
Take your lumps and move on. Don’t buy any more Argentine junk bonds. Next time they get themselves boxed into the corner, let them crash.
Thank you. Holly smoke! I’m against courts, especially foreign courts (from Argentina’s view, but I’ll explain) in deciding sovereign issues.
The US is signatory to several treaties that tie our sovereignty to the decisions of foreign courts. For example, GWB put a tariff on steel to get votes from Pennsylvania. (BTW, this pissed me off as it doubled the price of steel I had to buy at the time.) We were taken to a foreign court and lost (almost a forgone conclusion). The treaty allowed our trading partners to put tariffs on anything they wanted to. The resulting financial impact forced Bush to rescind the tariff. This is also, most likely, how the UN arms treaty would be enforced.
It’s unlikely any foreign judge would ever find for the US. Therefore we should not set a precedent of our courts deciding to penalize other nations.
Further, I suspect there is no way to ever get out of these treaties, as that would be an issue decided in a foreign court. Our trade could be permanently destroyed.
And it is clear that the Argentinians are acting in bad faith. The people they're calling "vultures" have repeatedly said they're willing to negotiate and restructure this debt, and the Argentinians have refused to talk to their creditors? Why? Because that's what Leftists do.
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