Argentina, a sad fulture story...

I just finish reading an article about the American Vulture Investor Paul Singer, this is about as bad as it can get, one Country at the mercy of one guy...

"Purchasing sovereign debts
See also: Vulture fund and Argentine debt restructuring

In 1996, Elliott bought defaulted Peruvian debt for a reported $11.4 million. In 1998, a U.S. court ruled that one could not buy debt with the sole purpose of suing the debtor. Elliott won a $58 million judgment when the ruling was overturned in 2000.[citation needed]

After Argentina defaulted on its debt in 2002, NML Capital Limited, a Cayman Islands-based offshore unit of Paul Singer's Elliott Management Corporation refused to accept its offer to pay less than 30 cents per dollar of debt. These are bonds with a face value of $630 million, for which NML reportedly bought for $48 million,[10] but that Elliott assessed were then worth $2.3 billion with accrued interest.[3][11]

In early October 2012, NML arranged for the seizure of an Argentinian naval vessel in Ghana, the ARA Libertad, in an effort to force Argentina to pay its debt. Argentina, however, refused to pay the debt, and shortly thereafter regained control of the ship and removed it from Ghanaian waters.[12]

In a November 2012 piece in the Huffington Post, Argentina's Foreign Affairs Minister, Hector Timerman, harshly criticized Singer for attempting to collect on the debt. Calling Singer “the inventor of vulture funds,” Timerman argued that the $127 million Singer had received from the Republic of Congo to settle a $400 million debt he had acquired for $10 million “should be going to build roads, schools and other poverty reduction programs.”[13]

According to the Financial Times, "Mr Singer chafes at the term 'vulture fund'".[14] Patricia Adams, the executive director of Probe International, wrote that "the pejorative is highly misleading," arguing that the funds are simply bondholders seeking to collect debts.[15]

In his investor letter for the fourth quarter of 2012, Singer described Argentina’s response to the court's ruling as “defiant and acrimonious,” saying that its dismissal of the ruling as “judicial colonialism” was “puzzling,” given that Argentina had chosen “to submit itself to the jurisdiction of New York courts and to waive its sovereign immunity.”[16]

In February 2013, the U.S. appeals court heard Argentina's appeal in the NML case.[17] In March 2013, Argentina offered a new plan that was judged unlikely to be acceptable to the New York court.[18] On August 23, 2013 the U.S. Court of Appeals for the Second Circuit affirmed the lower court's verdict and dismissed said plan.[19] In June 2014, the U.S. Supreme Court rejected Argentina's appeal of the ruling.[20]"

Peace

 

Perhaps if these dead-beat countries would honor their obligations, vulture capitalists could not operate. Rule of Law is the basis for any civilized international commerce. Obviously, these debtor countries have little intention of dealing in an honorable fashion, so I have zero sympathy when they are being raped financialy, as they had intended to rape their creditors. The countries should look into the personal finaces of the tin-pot dictators/rulers to re-coup some of their nation's treasury. Pay your debts---OR have a two ocean navy with 11 nuclear carriers to "back your default play"!

 

Sorry, I was not very clear minded this morning and forgot the link to the Wiki page, also I did not bother to mention that the situation is actualy quite simple, Argentina has the money ready to pay it's international interest obligations but is stopped from paying by court orders from a New York court...
I am a bit surprised at your reactions so far, is it not true that our western banks go and OFFER those credits to those countries, are not the western countries OFFERING assistance(see Ukraine), that are tied to conditions...

Paul Singer (businessman) - Wikipedia, the free encyclopedia

 

Of course, I forgot to blame the Swiss, but we are in good company...

Cayman Islands Banks - Find Banks in Cayman Islands Yellow Pages
Offshore Banks Directory, offshore banks list - Offshore Banks

 

Some people are even looking much further into the future...

" If this happens, if judge Griesa’s decision prevails – it may set a nasty precedent, one that not only may backfire on the US, but on the rest of the western economy. It would create chaos. Every debtor nation could reason, why should we honor a debt amortization agreement, if there is a US judge and US jurisdiction that can undo at will earlier agreements among sovereign nations?

But there is hope. Russia and China are not playing along. They are not puppets. In fact, they are the last fortifications that the dying beast, headed by Obama is vying to defeat with all means possible to achieve world hegemony – the One World Order; with propaganda lies and falsehoods, slandering of true world leaders, and – of course – with ‘sanctions’, ridiculous self-defeating sanctions.

Rather sooner than later the world will seek an alternative monetary system, one completely delinked from the dollar; from Wall Street, from the US all-usurping dictate. It’s already happening. When another outrageous US court punished the French bank BNP Paribas with a salty US$ 9 billion-plus fine for dealing with Iran, the French Central Bank started negotiating with the Chinese Central Bank for Euro-Yuan swaps which would allow them in the future to transit directly through Beijing for international payments, sidelining the dollar and the New York banks."

Argentina Must Not Follow NY Court’s Dictated Path to Bankruptcy

 

Bad guys, good guys and winners... how do you tell them apart?

OK, let me see this through my eyes. Who are the real bad guys and who are the real good guys. As in all judgement cases it depends on your point of view as to who is bad or good. Who do you see as the bad guys and good guys? For me, it is difficult to figure out but obviously there are some winners:

A bond creator, Argentina, sells bonds for money and promises to pay the money back with a good rate of return, but then decides they will not pay the money back as promised. So they are making large amount of profit on bond sales. Is this bad or good for the way they live up to their financial obligations to their original investors/purchasers? They are the good guys for whoever used the money made from bond sales in hopes of not paying it back and anyone who believes in redistribution of wealth concept. Mostly like they are bad guys to their original investors/purchaser and whoever tries to sell bonds in the future and has very few buyers in line for this type of bond. The bond purchaser/investors, who are now working their asses off, and risking their investment just to make Argentina do as they promised to their bond holders are probably not happy either. This seems to be a redistribution of wealth program to bond creator who are keeping the bond purchasers/investor money from bond purchaser/investor but not in a popular direction in some parts of the world. Argentina is upset because they may have to pay in full, and some new investor took the risk so they were motivated to take them on in court. Lot of good and bad guys in this part it seems.
An original bond purchaser/investors who purchased bonds in hopes of making money on the promised interest and principal return gets scared (freaked out ) and sells the bonds at a discount trying to recover part of their investment. So they recover a small part of their investment. Are they the good guy or bad guy for trying to survive? Of course they made the new investor with bigger balls look like a bad vulture.
A New Investor, does some research and decides he can recover the full amount after years in court risking his investors’ money and attorney fees, and buys the bonds at discount thinking he will make some money for his investors. So he demands payment and wins a court case requiring the original bond creator to uphold their promise to pay. (It is a unique concept of full filling what you promise that seems to be is held up in court). He is the bad guy for the bond creator (and the people of Argentina who also do not want to pay the money as promised). He is called a “vulture” by the orginal bond creator for forcing them to do as they promised. He is a good guy to his investors who he promised a good rate of return and looks like he may prevail. This endeavor of course if also a redistribution of wealth back to the current purchases/investors who hold the bonds now. Of course the New Investor is a bad guy to some people of the world who do not believe in keeping promises, in this case Argentina’s promise to pay, while he keeps his promise to his own investors for a good rate of return.
Ok, so there are good and bad guys depending on your political bend and thinking. But who are the winners?

Of course if you have ever been involved in a court case you know who the winners are: the attorneys who win when they win, and win when they lose…. Because they make the rules, are mostly likely to become law makers and eventually judges too