Discussion for article #225771
Ms Kirchner doesn’t want to lose anything from her property portfolio .
Can’t imagine why they wouldn’t want to compromise with people who bought debt at pennies on the dollarafter a default, then demanded it be paid in full.
Also, who are the USA to tell Argentina that it can’t repay a private debt to some creditors? Talk about arrogance!
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Falls / pushed…is there really any difference?
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I’m confused–is this a default on fresh debt, or is this a failure to pay another portion of the old debt?
Old.
After they defaulted the first time, vulture capitalists moved in and bought the debt at pennies on the dollar.
When Argentina recovered, they demanded the whole debt be repaid in full, plus full interest.
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The default is failure to make a scheduled payment on new debt. Argentina wants to make the payment , but a US court ruled that Argentina can’t make payments on the new debt without first taking care of the old debt.
In an earlier default, Argentina reached an agreement with holders of most of the debt. There was some debt that was not part of the agreement. I don’t know if it was because the holders objected or because they just didn’t participate in negotiations. At any rate, that part of the old debt was not retired and had little market value. That is what the vultures bought for a pittance and want repaid at full face value plus interest, etc.
The vultures were relying on Argentina giving in, because a default on the new debt is very disruptive and harmful to the country (not to mention the holders of the new debt).
The vultures might try to claim some noble underpinnings (“rule of law,” “the vital need to encourage lending by enforcing bondholder rights,” etc.), but they are just scum out to make more money they don’t need for doing nothing that the US, Argentina, or the world needs.
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Short version - US based hedge funds are involved, you should be able to fill in the rest on your own.
Neither lending nor borrowing should be risk free. Paradoxically, when risk is eliminated or becomes one-sided, danger increases.
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In a statement, the hedge fund run by New York billionaire Paul Singer said the mediator had proposed “numerous creative solutions,” to resolve the standoff.
IOW, choices like the murderers who broke into your home and asked you: Which family member you want them to shoot first?
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“Argentina would have benefited more from complying with the court order in order to get financing for Vaca Muerta,” he added, referring to an Argentine region that has one of the world’s largest deposits of shale oil and gas.
Why is the benefit of those natural resources time-dependent? Is there some kind of extraction deadline?