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This makes me think of Hedge Funds as if they are clans, like during japan's feudal era. No wait, pirates !!
> The vulture funds have crossed a new limit
in their attacks on the Argentine Republic. <
If NML moves its headquarters onto the ship, they can sail around the
world like real pirates. Kinda like that Monte Python movie.
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See this on the next episode of Repo Games... hahahahaha
No one expects the Ghana repossession!
That's some dirty pool.
Well, truth be told, Argentina had it comming. It's what happens when you owe money to half the planet and then unilaterally decide you are just going to pay 1/4 of it and only to people of your choice.
I love my Argentinian neighbours, but spending ten times more than what you can produce, particularly when other people are paying for it, is not a good call.
Just to put this in perspective, this is a sailing ship. While it is technically a part of the Argentine navy, it is only used for training and ceremonial functions, and its only armament is ceremonial 19th century cannon.
Oh, sure. That's what they WANT you to think!
So where are the big fat dudes that pepper spray everyone?
unilaterally decide you are just going to pay 1/4 of it and only to people of your choice.
AFAIK, everybody was offered the same deal, these guys just chose not to accept.
argentina made it a one-time offer in order to inspire most creditors to accept.'rule of law' is based on sovereign countries, who by their own law can default on debt.
argentina is no longer living off of/creating new debt, so good for them.
regular citizens even used to be able to declare bankruptcy and write down their debt,
before Clinton helped the banks remove that avenue for re-establishing a productive life free from debt slavery.
of course, corporations can still go bankrupt, and their owners are inherently shielded from obligations anyways.
bankruptcy is broken.
??? how so, most countries moderate their deficit spending given market pressures on bond rates, since having a credit line is convenient. japan is probably the outlier, since they have alot of domestic savings invested in very low rate bonds. greece is in a huge problem, but defaulting on their debt would end the problem... if they had done it years ago they would be better off. creditors continuing to loan them money is the problem, not non-existent bankruptcy.
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Default is not the same as bankruptcy.
Argentina has not declared bankruptcy and has enough money in its central bank's reserves to pay back the bonds. The 2005 swap also didn't turn out to be a one time deal. Back before this last election the President of Argentina offered another one at better terms. It's going to be paid back sooner or later, Argentina wants to sell the oil industry it nationalized on the international market and can't do that with the pile of judgments waiting to be enforced against it.
It still cannot be that a privately owned company seizes property of a sovereign nation, no matter what. Of course Argentina needs to pay its debts, but this is going too far. Whats next? Seizing the Acropolis?
It still cannot be that a privately owned company seizes property of a sovereign nation, no matter what. Of course Argentina needs to pay its debts, but this is going too far. Whats next? Seizing the Acropolis?
Actually, if Greece does eventually go through some kind of Bankruptcy process, then that would not be an issue. The Bankruptcy process itself would protect them.
Argentina did not go through any Bankruptcy (if they had, this move would be legally impossible). They simply defaulted.
It still cannot be that a privately owned company seizes property of a sovereign nation, no matter what.
Cannot be? It's absolutely standard practice. Every country that stops paying its debts knows that they're going to have their overseas assets seized, because that always happens. Argentina just likes to whine about it for some reason, like being treated like any other country is some sort of special persecution.
I think Argentina should just be thankful the older approach of invading the debtor country and shipping its tax revenue to its foreign creditors until the debt is paid in full is out of fashion.
It still cannot be that a privately owned company seizes property of a sovereign nation, no matter what. Of course Argentina needs to pay its debts, but this is going too far. Whats next? Seizing the Acropolis?
Argentina decided on its own to sell sovereign bonds specifically to private investors, and thus willfully took on the obligation to repay them with interests. Then rather than undergoing a proper negotiation, it unilaterally decided that they were not going to pay the owed amount, and told investors that those who didn't like it would get nothing.
One may question why public property, which supposedly belongs to everyone in the country, should be used to pay national debt. But then again, national debt also belongs to the public; when your government issues sovereign bonds, it is using the national property and production as collateral. It is effectively borrowing money in the name of everyone in the country.
In the end, if someone owes you money, natural person or state you want it eventually repaid. And to put it into perspective, it is not just big banks here; a huge amount of individual persons lost their savings after Argentina decided not to pay back the whole amount (from what I recall, the majority was in Italy, where those bonds were widely bought), including retirement funds of the elderly. A great deal of the judiciary actions taken against the argentinian state originate from those people, who in absolute terms got the worst part of the deal, since they don't have the same financial flexibility and stamina as the bigger players do, nor the negotiation capacity to get something better out of it.
All of this, coupled with Argentina cooking up its numbers before -and during, and after- selling them bonds, by reporting misleading poverty, inflation, productivity, and expenditure levels (which are some of the key things you measure the risk of a sovereign bond against), results in a very reasonable scenario for a ship to be seized.
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pay your bills and quit taking loans you cannot pay. be this a person or nation.So...when China comes to collect on US National Debts...you'd be OK with that?A somewhat different story. The US's debts are denominated in dollars. We can always give China dollars to pay them off if we wanted to.
It would lead to high inflation and make it harder to borrow in the future, but so would defaulting.
So print more pretend money to pay off a debt that can only really be paid in Resources of equal or better value to the debt. Hmmm...did that work for Argentina? Nope.
Frankly, I expect Argentina's leaders deliberately chose an approach to the Argentine debt that would provoke ongoing international disputes. Being able to regularly whip up nationalist fervor is a much simpler strategy for maintaining popular support than competent governance, and it's not like Argentina's leaders have ever demonstrated competence at governance at any point in the last eight decades.
IIRC, Argentina chose default after years of following IMF prescriptions that gutted the economy and just kept making the situation worse.
Which was bad in the first place because of the inevitable collapse of Argentina's unbacked dollar peg. Which was adopted as a cure for Argentina's hyperinflation. Which . . . well. Eight decades.
Default was a desperation move and it pretty much worked. The economy crashed hard, but recovered fairly quickly.
Recovered? If you believe the government's official numbers, sure.
When the inflation rate is 25%, it becomes quite easy to produce 9% GDP growth; INDEC just underestimates inflation by enough to produce an inflation-adjusted GDP number that went up 9%. Which has the added advantage, when Argentina's got half its new debt indexed to the inflation rate, of reducing the amount of interest Argentina has to pay on its bonds.
Though INDEC actually uses two different numbers for inflation, one lower one in official inflation reporting, and a higher one for GDP calculation, though neither is actually equal to the real inflation rate. Nobody would believe reports of 15% annual growth, after all, and that would result in Argentina having to pay too much on its GDP-indexed bonds.
IIRC, Argentina chose default after years of following IMF prescriptions that gutted the economy and just kept making the situation worse. Austerity led to deeper recession, which led to less revenue and deeper deficits, which led to requirements for more cuts which led to the GDP dropping.
Well that's pretty much the goal of the IMF. It's far less about helping out nations in need than enforcing a pretty brutal rightwing macroeconomic consensus.