Effects Of A Default On Expats

[French jurist]

You need to stock on Scott (repeat 6 times, same thing as for ORL)

 

[mc kenna]

So I should bring back toilet paper rather than maple syrup or apple products on my forthcoming trip back north.....

yeah or land mines and rocket launchers

 

[gpop]

Do you pretend there will be another corralito? Because I certainly don't (this can frighten newcomers here...).
Furthermore I'd prefer to put my savings in another country than having them at home in Argentine (wether gold, jewelry, peanut butter, etc.)

It's happened before, who's to say that it cannot happen again.
What I'd like to do is buy Canadian gold coins for majority of my savings then some junk gold that can be liquidated easily should I need it.

 

[ajoknoblauch]

So I should bring back toilet paper rather than maple syrup or apple products on my forthcoming trip back north.....

Take the TP to Venezuela.

 

[Davidglen77]

Most of you haven't thought of this, but investing in MERVAL (Buenos Aires Stock Market) is a great option. You have to open a brokerage account (called a "cuenta comitente", there are many brokers in Microcentro) and the returns on some of the stocks have been over 200% in the past year. Some mutual funds in the 80% range. That has outpaced inflation between 2x and 5x and devaluation by 3x. Also you can buy bonds in pesos and sell them in US dollars, at the "contado con liqui" rate which is currently around $10 : $1 USD, and have US dollars credited to your account in the US. This is TOTALLY legal in Argentina. This is only for people with permanent residency and provable income en blanco. You must be able to justify your peso income via employment in Argentina / and savings via bank statements and proof of deposit. It's really the best thing going and the best way to not only save but really make some good returns on otherwise devalued currency. I am sure this is not going to last forever, but it's been going up and up since the cepo cambiario was put in place. I am sure once the currency restrictions are lifted these returns will deflate like and old helium balloon.
http://internationalinvest.about.com/od/internationalstockindices/a/Argentinas-Mercado-De-Valores-merval-Index.htm

 

[AmigoArtistico]

Complex situation (there's no international Law of sovereign bankruptcies), the solution might actually be political, but not in the way like Obama overriding Griesa's decision (I did read something about that some weeks ago: when a judicial ruling affects substantially foreign policy, the President has such a power. If someone knows more about that?), since obviously BO won't wet his shirt now to defend directly Argentina (a bit too late indeed).
Solution might be political because Griesa's decision (and the fact the SC refused to look at the case) simply puts private interests (and not yours or mine, we are little fish) before the sovereignty of the states.
That's already a problem because if Griesa's ruling indeed applies to bonds under the NY law, it's hardly arguable that Europe is under the sovereignty of Griesa's Court (that's why the BONY is in an aweful situation).

To reverse things, I sincerely don't think that US investors buying bonds under the NY law would accept not getting paid because a Belgian court decided otherwise (or not?!). In fact, I think the situation would be very different and if the USS Nimitz was seized in Cameroon, US reactions would also be different.

I'll dare to pretend that Argentine's position is stronger than the Vulture funds ones (for political reasons).

Please explain, with specific details, how you think a political solution could possibly occur. Do you know something that we don't? Seriously, I'm very interested in how this could realistically be possible. Do you have some special inside information that the rest of us don't have?

Also, in light of the fact that Argentina has lost the lawsuit -- and all possible appeals -- against the holdouts, could you please explain, again with specific details, how Argentina's position could possibly be stronger than the holdouts (...for political reasons... does not qualify as a specific detail).

Seriously, if you know something that we don't, please tell us.

 

[French jurist]

Please explain, with specific details, how you think a political solution could possibly occur. Do you know something that we don't? Seriously, I'm very interested in how this could realistically be possible. Do you have some special inside information that the rest of us don't have?

Also, in light of the fact that Argentina has lost the lawsuit -- and all possible appeals -- against the holdouts, could you please explain, again with specific details, how Argentina's position could possibly be stronger than the holdouts (...for political reasons... does not qualify as a specific detail).

Seriously, if you know something that we don't, please tell us.

Of course I don't know things you don't know. But, and I never thought I'd quote this guy, there are known knowns, known unknowns, etc.
It's a case mixing international law, sovereignty of the states, political pressures, the right for a state to default (right existing since the Middle Ages), future of debt restructuring (with or without the pari passu), legal interpretations, future of Argentina and many more aspects including psychology (e.g. CFK likely wanting to appear as the savior, Griesa oddly mentioning very trivial details like complaining in 3 distinct occasions that his vacations were interrupted or giving his personal opinion about a sovereign country which both are quite surreal, it's like going to see a doctor for a cancer and listen to him complaining about a headache).

When mixing all those, you come up to hypothesis.

So, how could it be solved by a political decision:

- First, the most obvious: Singer et al. live in the same "small world" as those judges (Singer finances the election of judges), worldwide political leaders (Singer gives speach at international summits), the other funds who accepted the restructuration, etc.

Griesa's decision will be the victim of its own paradox: pretended being above the sovereignty of the states (not only Argentine's sovereignty but also the sovereignty of other states since one of the main components of sovereignty is the control of domestic financial markets) but his ruling cannot be really enforced fully, precisely because of the sovereignty of the states (superior to any authority Griesa's has of course).
It has been explained already but both the Vulture funds & Argentina wouldn't benefit from a default, therefore in this context of negotiations, it's about what Singer is ready to accept & what Argentina is willing to give.

It's more than likely (known unknowns) that Singer et al. have talks with foreign political leaders, IMF & other institutions officials, other fund investors, etc., many of whom being also in favor of a succesful negotiation.

That's why the solution might be political in this sense, indirectly: Singer (who is certainly not a dumb, although being a sc*mb*g) knows he has to negotiate, not only to get the money, but also to fix a situation which has gone too complex & heavy.

I'll think of additional political scenarios today, jeje

***

About "Also, in light of the fact that Argentina has lost the lawsuit -- and all possible appeals -- against the holdouts, could you please explain, again with specific details, how Argentina's position could possibly be stronger than the holdouts"

There have been quite many posts about that. It's an "if" explanation

- Argentina has indeed lost a lawsuit which cannot be really enforced fully (it's a "head I win, tail you lose" situation).
But lawsuits have been initiated against the BONY, this bank facing already a lawsuit btw (allegedly stole 2 billion dollars from US pension funds). If the BONY loses those lawsuits and ends up paying a big fine, firing a few 1000s employees on the way, while perjudicating NY has a financial center & with the possibility that the US taxpayers are called in to save the bank (don't tell me this can't happen... There's a new concept since 2008 "privatizing the profits, mutualizing the risks"...), then Argentina won't be in the weaker position.

- If Griesa (who returned from vacations a few days ago) keeps on blocking the payments to EU or JP bondholders, and if the negotiation is not succesful, and if there's a technical default (while Argentina actually paid the restructured bond holders), then Argentina can sue the BONY, the CDS might not even activate (loss for the Vultures) and the Vultures won't receive anything, in which case Argentina won't be in the weaker position.

This could be developped, but Griesa's decision has a major flaw = ignored the fact that some bonds were issued under other jurisdictions (it's not my interpretation = http://en.mercopress.com/2014/07/08/eu-holders-of-restructured-argentine-bonds-begin-court-actions-in-belgium or http://www.buenosairesherald.com/article/164289/jp-morgan-writes-letter-to-us-judge-griesa-asks-for-payment-to-japanese-bondholders).

The fact that Griesa ruled again in a very unusual way (foreign bonds), which could have consequences for NY as a financial center certainly profits now to Argentina, at least on my opinion.

 

[ghost]

It's happened before, who's to say that it cannot happen again.
What I'd like to do is buy Canadian gold coins for majority of my savings then some junk gold that can be liquidated easily should I need it.

Argentina is "Ground Hog Day" at a national level.

 

[AmigoArtistico]

Of course I don't know things you don't know. But, and I never thought I'd quote this guy, there are known knowns, known unknowns, etc.
It's a case mixing international law, sovereignty of the states, political pressures, the right for a state to default (right existing since the Middle Ages), future of debt restructuring (with or without the pari passu), legal interpretations, future of Argentina and many more aspects including psychology (e.g. CFK likely wanting to appear as the savior, Griesa oddly mentioning very trivial details like complaining in 3 distinct occasions that his vacations were interrupted or giving his personal opinion about a sovereign country which both are quite surreal, it's like going to see a doctor for a cancer and listen to him complaining about a headache).

When mixing all those, you come up to hypothesis.

So, how could it be solved by a political decision:

- First, the most obvious: Singer et al. live in the same "small world" as those judges (Singer finances the election of judges), worldwide political leaders (Singer gives speach at international summits), the other funds who accepted the restructuration, etc.

Griesa's decision will be the victim of its own paradox: pretended being above the sovereignty of the states (not only Argentine's sovereignty but also the sovereignty of other states since one of the main components of sovereignty is the control of domestic financial markets) but his ruling cannot be really enforced fully, precisely because of the sovereignty of the states (superior to any authority Griesa's has of course).
It has been explained already but both the Vulture funds & Argentina wouldn't benefit from a default, therefore in this context of negotiations, it's about what Singer is ready to accept & what Argentina is willing to give.

It's more than likely (known unknowns) that Singer et al. have talks with foreign political leaders, IMF & other institutions officials, other fund investors, etc., many of whom being also in favor of a succesful negotiation.

That's why the solution might be political in this sense, indirectly: Singer (who is certainly not a dumb, although being a sc*mb*g) knows he has to negotiate, not only to get the money, but also to fix a situation which has gone too complex & heavy.

I'll think of additional political scenarios today, jeje

***

About "Also, in light of the fact that Argentina has lost the lawsuit -- and all possible appeals -- against the holdouts, could you please explain, again with specific details, how Argentina's position could possibly be stronger than the holdouts"

There have been quite many posts about that. It's an "if" explanation

- Argentina has indeed lost a lawsuit which cannot be really enforced fully (it's a "head I win, tail you lose" situation).
But lawsuits have been initiated against the BONY, this bank facing already a lawsuit btw (allegedly stole 2 billion dollars from US pension funds). If the BONY loses those lawsuits and ends up paying a big fine, firing a few 1000s employees on the way, while perjudicating NY has a financial center & with the possibility that the US taxpayers are called in to save the bank (don't tell me this can't happen... There's a new concept since 2008 "privatizing the profits, mutualizing the risks"...), then Argentina won't be in the weaker position.

- If Griesa (who returned from vacations a few days ago) keeps on blocking the payments to EU or JP bondholders, and if the negotiation is not succesful, and if there's a technical default (while Argentina actually paid the restructured bond holders), then Argentina can sue the BONY, the CDS might not even activate (loss for the Vultures) and the Vultures won't receive anything, in which case Argentina won't be in the weaker position.

This could be developped, but Griesa's decision has a major flaw = ignored the fact that some bonds were issued under other jurisdictions (it's not my interpretation = http://en.mercopress...ese-bondholders).

The fact that Griesa ruled again in a very unusual way (foreign bonds), which could have consequences for NY as a financial center certainly profits now to Argentina, at least on my opinion.

Thanks for taking the time to summarize all the things that you've said previously. Seriously. It takes time to sit down and organize all your thoughts like that in one post.

That being said, I think that most (not all) of what you said is an odd mix of

• conspiracy theory,
• insults and seeming suggestions of corruption (perhaps unintentional) toward the judge and the US judicial system,
• misunderstanding of the US judicial system,
• outdated information (e.g., future of debt restructuring being at risk),
• ideas not based in reality

Some points:

• The judgement has been rendered and it is in force now.
• The effect of this case on other world debt restructurings has been discussed in dozens of recent news articles. Argentina's claim on this is pure smoke.
• The judge has already blocked the payments to the other bondholders, and unless he sees progress in the negotiations between the parties, it seems extraordinarily unlikely that he will suddenly change a position that he has held for years, which has been upheld by the full appeals court of the state of New York and given tacit approval by the US Supreme Court.
• The notion of somehow looking to the international courts to resolve this is absurd. Putting aside the fact that Argentina would likely lose such a case, there are fifteen days to resolve this matter before Argentina falls into default.
• I don't even know how to address your odd parenthetical comments in the first paragraph about the role of psychology (which itself is an odd notion).
• Griesa's ruling has been proven, by being accepted by the appeals court, to be above the sovereignty of Argentina, and is being enforced.
• The notion that Argentina committing financial suicide by defaulting puts them in a stronger position is also absurd. The holdouts want to collect, but they're not going to have the terms dictated by Kiciloff. They've been patient for years, and I'm sure that rather than accept a ridiculous offer from Argentina, they'll wait a few more.

The bottom line on all this is that maybe some of your ideas would have played out or helped Argentina if they had been presented earlier or if there were more time now. But there's a hard deadline in fifteen days, and I don't think you've offered any ideas that could lend themselves to a political solution to this problem in the next fifteen days.

Maybe I'm wrong. It certainly wouldn't be the first time. But I don't see anything in what you've said, or from anywhere else, that suggests some last minute political solution.

 

[Jaredberryman]

By the way, the banks can access your safety deposit boxes? Or was it an aberration? If true, was it across the board, institutionalized robbery? Or private individuals?

Actually, lacoqueta, the banks weren't the one raiding the safety deposit boxes in 2001. It was the Argentine government. People had kept jewelry and gold in safety deposit boxes, only to find that through the corralito law, the the gov. had taken it. Will that happen again? Probably not. But here in Argentina, you never know. If it happened then, it can happen again. A bank is not a safe place to keep money in this country. The best place is in another country--preferably in a northern European country, or the United States, where your money is insured.