Kicillof Pays To 92% Of Bondholders, Griesa's Move Now?

[Hybrid Ambassador]

What Argentina needs to do to come out of current crisis in which will need lots of billions:
Sell all future Petro recovery and all grains to PRC as did Brazil in selling all off shore production
to the Chinos for a mere US$40 Billion!

 

[Don Alberto]

I received a mail, saying "Bajo_cero2 quoted a post you made"

The bonds were sold to more than 500,000 buyers, app 44 percent of the value (app 36 000 million) bought by retail investors, typically saving for their future pension only to have it stolen by Argentina.

Bajo_cero2: "Here we have another "expert"."

From the real world, showing yet again that Bajo_cero2 doesn't know sh1t about what really happened:

Argentina's debt restructuring: A victory by default?
"The options available to more than 500,000 aggrieved creditors of the Republic of Argentina, which defaulted on bonds worth $81 billion in December 2001, were more limited."

http://www.economist.com/node/3715779

But of course, Bajo_Einstein knows better than the specialist from The Economist, who has researched the case.

 

[Don Alberto]

I forgot to provide the source for the percentage of retail investors.

"The Argentine Ministry of Economy and Production has estimated that 56.5 percent of the value of the defaulted debt was held by institutions and 43.5 percent by retail investors. The Argentine government also estimates that Argentines held a little more than one-third of the defaulted debt, with more than 60 percent distributed among lenders in many foreign countries. Italy, Switzerland and the United States account for more than half of all foreign holdings of the defaulted debt.."

Source: Robert J. Shapiro & Nam D. Pham: "Discredited – The Impact of Argentina’s Sovereign Debt Default and Debt Restructuring on U.S. Taxpayers and Investors" p. 13

Dr. Robert J. Shapiro has been a Fellow of Harvard University, the Brookings Institution and the National Bureau of Economic Research, and Counselor to the U.S. Conference Board. He holds a Ph.D. from Harvard, as well as degrees from the University of Chicago and the London School of Economics and Political Science.

Dr. Nam D. Pham has been an adjunct professor at the George Washington University, where he has taught undergraduate and graduate courses in monetary economics, international trade and finance, macroeconomics and microeconomics. Dr. Pham earned a Ph.D. in economics from the George Washington University with concentrations in international trade and finance, economic development and applied microeconomics, a M.A. from Georgetown University and a B.A. from the University of Maryland.

- but of course Bajo_Einstein knows better than these two, who only hold Ph.D.s in economics.

 

[Don Alberto]

A Buenos Aires vulture

Hedge Funds leading the battle for full repayment aren't the only holdouts.

Norma Lavorato worked and saved for decades, but has spent most of her twilight years waiting for the Argentine government to pay back the US$ 45,000 she invested in sovereign bonds and lost in Argentina's massive 2001 default.

"I've had patience, a lot of patience," said Ms. Lavorato, a spry 85-year-old who turned down the small settlement offers the government made to other bondholders."

http://online.wsj.com/articles/new-york-talks-lift-hopes-of-small-argentine-bondholders-1404688383

 

[EdRooney]

I have to give you this Alberto: I've never seen anybody who can match your ability to take a misconception and then argue for it so tenaciously and actually quite effectively. In that sense, in spite of your being blatantly wrong, you have my admiration.

I do have a couple of quick questions though.

1. Do you think that stocks should also be guaranteed the same way you are arguing sovereign bonds should? What about other risky investments (venture capital, lottery, casinos...)?

2. Do you understand what such guarantees would do to yields? With global yields at an all-time low, developing market sovereign bonds are one of the few places investors can get a yield over 4%. Do you understand what would happen to investment in developing markets if they could no longer offer those returns because they guaranteed their repayment?


Again, I don't agree with you, but I dig your style.

 

[ajoknoblauch]

- but of course Bajo_Einstein knows better than these two, who only hold Ph.D.s in economics.

Perhaps he simply believes that Argentine "rules" apply everywhere the government of the moment thinks they should.

 

[Bajo_cero2]

There is something called alea in latín. Alea means risk. If you don t want risk, you can invest in US or Germán bonds.
The bigger the risk is, the profit should be too. But the alea is always there and in the AR case the alea happend: default.

However, after some years, the President offer to pay with a discount and about 90% took it. This common people you talk about trying to confuse the readers. They didn t loose money.

But there is also what is called the vulpures founds who pretends the high profit without the risk, without the alea.

I like to read the economist BUT when Argentina was creating the debt (applying the economy policies of those genious you like yo quote) the Economist had only flowers for Argentina. We all know how did it finished.
If the Economist critize Argentina, it means things are good for us.

 

[Bajo_cero2]

Perhaps he simply believes that Argentine "rules" apply everywhere the government of the moment thinks they should.

Economist with a PhD are like good lawyers: both créate rules that allow them to win. While lawyers win cases, economist develope rules to win money: to make his economy stronger. It is not a science, it is doctrine.

If we follow those rules, we fall into poverty and they get richer. It is not neutral.

 

[Don Alberto]

I have to give you this Alberto: I've never seen anybody who can match your ability to take a misconception

Simply claiming that I make a misconception is doubleplusungood, especially as you on previous occasions have misinterpreted my stance.

Point the specific misconception out.

1. Do you think that stocks should also be guaranteed the same way you are arguing sovereign bonds should? What about other risky investments (venture capital, lottery, casinos...)?

Of course not, and the same goes for e.g. corporate bonds. Sovereign bonds, on the other hand, are guaranteed by a state which, in particular in the case of Argentina, has huge assets compared to e.g. corporations (except the largest multinationals). A retail (non-professional) investor has - should be able to have - confidence in a state's willingness and ability to comply with its obligations.

2. Do you understand what such guarantees would do to yields? With global yields at an all-time low, developing market sovereign bonds are one of the few places investors can get a yield over 4%. Do you understand what would happen to investment in developing markets if they could no longer offer those returns because they guaranteed their repayment?

(my emphasis on are).

The Argentine sovereign bonds weren't issued in 2014, so are is irrelevant.

Now, tell me, in the years 1994 to 1998, which yields could be obtained on the global market, English, French, Italian, Indonesian, Taiwanese, etc. bonds?

In the same time span, how many percent were the yields on Argentine sovereign bonds?

Another important parameter in the default: What percentage of GDP did the Argentine sovereign bonds represent in e.g. 1994 and 2001?
(I do of course know the exact numbers, so check them carefully)

Previously, developing countries, in more numerous cases than I care to list, used e.g. the income from guano, from the customs house, from the railroads, oil wells, etc. as a guarantee for repayment. (Argentina, Chile, Uruguay, Peru, ..., have done excatly that in the past).

When it comes to the Argentine sovereign bonds, the more than half million retail investors had no idea of risk assessment, their guidelines came from Argentine propaganda propagated in Western newsmedia, same as one previosly could read in e.g. New York Times how marvellously cheap, etc., Buenos Aires was (you may remember the debate on baexpats then).

Again, I don't agree with you, but I dig your style.

You may kiss my big toe

 

[ajoknoblauch]

Economist with a PhD are like good lawyers: both créate rules that allow them to win. While lawyers win cases, economist develope rules to win money: to make his economy stronger. It is not a science, it is doctrine.

If we follow those rules, we fall into poverty and they get richer. It is not neutral.

Perhaps this would make more sense in Lunfardo.