Why Are Dollar Bonds Being Abandoned By Investors ??

[Redpossum]

In NY it called a fire of convenience when a restaurant burns down. It's just part of the plan.

An excellent observation, and highly relevant. I agree another default is coming.

 

[Redpossum]

Like socialists, libertarians have their good points, but their extreme disregard for the less fortunate overwhelms those good points. Selfishness is not a virtue, and never will be.

QFT^3

Your best comment ever. I do agree that the foreign policy suggestions offered by Ron Paul have great merit.

 

[Matiasba]

In the meantime, while everyone is slinging mud and trying to find labels for each other, the threat of another default is becoming more real...

http://finance.yahoo...-171927448.html

Sounds like Argentina is already anticipating the likely need for another default if the Supreme Court doesn't hear their case.

I dont know the next government but with this one a default just wont happen. Hyperinflation, social crisis, looting, etc, YES (we still have to see it) but a default surely not. Not with Cristina, be sure of that.

 

[GS_Dirtboy]

I dont know the next government but with this one a default just wont happen. Hyperinflation, social crisis, looting, etc, YES (we still have to see it) but a default surely not. Not with Cristina, be sure of that.

I wish I could be as confident as you, Matias. I remember not long ago she said there would NEVER be a devaluation of the Peso, not as long as she is president. That was 6 months ago. We've already had one devaluation and another to come probably in June/July.

 

[Matiasba]

I wish I could be as confident as you, Matias. I remember not long ago she said there would NEVER be a devaluation of the Peso, not as long as she is president. That was 6 months ago. We've already had one devaluation and another to come probably in June/July.

Im not actually that confident with this government. As I said many times I expect hyperinflation, looting, social crisis, basically because thats the way every single government ended since dictatorship. But default is something different, we didnt have it in 1989 or 1981, we only had it in 2001 and when the debt was a serious topic. Now the debt is totally under control, we still have some reserves in Central Bank, we have China, the price of commodities, plus much more industrial exports. There has been a diversification of Arg industrial exports in the past 15 years (after 2001 crash), it is practically other economy, other (national, and as I said, more importantly, INTERNATIONAL) actors, other variables, we have Brazil... it is very hard we have another default.

 

[ElQueso]

(wall o text edited for brevity)

Sorry, seemed like you needed me to be really clear since you seem to make assumptions based on such a little bit of data as one quote taken from something I wrote, taken somewhat out of context, and admittedly with the quote not being fully explained (that's what I get for making assumptions that someone might give me a break and not think I'm a monster based on one sentence!). And the following as well is me being clear. If you have any confusions, please ask me instead of assuming. If it's too long for you to read, I reckon it doesn't really matter to me at this point.

Libertarian, eh? Take a look, your boys Ron Paul and Rand Paul are both members of the Republican party. And in practical terms, Libertarians are Conservatives, because their policies would be hugely beneficial to the rich, and horribly detrimental to the poor. I don't need to hear about the theory, I've been lectured for hours about Libertarianism.

First of all, they're not "my boys". Second of all, I don't consider them Libertarians. Some Libertarians like them because they think at least someone is trying to represent Libertarian interests in the US government, but unfortunately, Rand and Ron are not Libertarians and do not represent Libertarian interests. They are Republicans. Tea Partiers are not Libertarians, they are Republicans. Rand and Ron are at best "Libertarian-leaning" Republicans, which is a dangerous thing in my opinion.

As I said, do some research. The people who have been lecturing you for hours haven't been cluing you in on what Libertarianism is if you think Rand and Ron Paul are the standard bearers. They also haven't been giving you any idea of what we believe about helping poor people if you think Libertarians don't care for poor people.

If you help 30 poor people every day, more power to you. I sincerely respect that.

Just our of curiosity, how many poor people do you help? Or do you rely on the "help forced at gunpoint" method for your charity?

But you were the one who said that your primary concern was for foreign investors. How do you expect that to be interpreted? If you care first about the poor, why didn't you say so?

"More than anything my thoughts on debt - and paying it back - relate to security for foreign investors at the business level." - El Queso

First, I don't "care first" about anyone, as you apparently do. I care about seeing all humans advance economically, socially, mentally and spiritually (not religiously - I despise religions).

I was answering a question from Matias related to why we didn't think a country should have debt and why a lot of us didn't like the Paris Club deal, also related to Argentina's ability to borrow money, and therefore be able to pay it back again.

In no way was I suggesting the most important thing should be foreign investors and their interests, but rather that if you want foreign investors (which I think is a good thing) you should create a stable environment that will attract foreign investors and you can't do that if you borrow money or make deals to pay back money, and then default. That's part of the reason why some (at least) foreign companies are pulling out of Argentina and taking their money with them.

I came here in 2006 as a foreign company. I considered myself a foreign investor as such, because I came here, set up shop and invested in the Argentine labor force. Oh, I'm such an evil beast. I employed 6 programmers and paid them some 25% more than the going rate and paid them in dollars to offset the inflation (which really was about 8% at the time, if memory serves, but I could be wrong) and not base their salaries on INDEC's figures (as the local companies wanted me to do - I much prefer to work with monotributistas than local company teams if I can help it). We didn't trust INDEC even then, but they weren't as big liars when we first came, as they were to become.

For some reason our employees were very happy with how we treated them, how we paid, etc, and I was pleased because I wanted to make sure I had happy employees. Because I am all of an employer, a humanitarian AND a Libertarian (again, among other things - I, like most people, have many facets).

I would not dream of coming in and doing that now, given the current state of affairs in Argentina. But I'm small beans.

Bigger companies that could come in and buy or rent properties (money going to Argentinos), renovating properties for their use (money going to Argentinos) and paying salaries (money going to Argentinos) and taxes (I don't like the government but not a whole lot of choice about that, still going to Argentinos but also finding its way into the crony's pockets) - ah, the horror that are foreign investors! But they are not as quick to come in nowadays and are even leaving as Argentina becomes more and more unstable. The Paris Club deal, if they default, will have further consequences along those lines. More debt that is not paid back would have consequences as well.

If you think having a foreign company come in and employ people at decent wages (specifically in Argentina) is a bad idea, well, that suggests to me that you don't care for the people. No need for foreign investment, no need for foreign ideas, isolation good. I understand that the people are not doing so well in Iran, and you have made it clear that you think they're doing great, so I guess that tells us where you stand for caring about the people, assuming we used the same level of criteria to judge yourself as you used to judge me.

So why didn't I just say "I'm for the poor?" What a ridiculous statement that would be with no other impetus given to make such a declaration. I make the assumption that everyone I meet (virtually or physically) is a humanitarian and self-aware until I see otherwise. But it seems that if I do not explicitly say that "I am for the poor", and because I believe foreign investment in a country can be a positive thing, your assumption is that I don't care about the poor - in fact, ALL I care about is foreign investment and whatever it takes to get it. I don't know you personally, but you seem very pessimistic when it comes to other people and how they think. Seems you make a lot of generalizations based on that.

Before I married my wife, she told me about her family's poverty. After we had been living together for a number of months, before we got married, she asked me if we could send $50 USD a month to her family. At this time only one sister was here, her older one, and there were 11 brothers and sisters back home. They just weren't making enough money from their farm. Sesame is not a very good-paying crop and Paraguay exports so much of it, and it's become such a good business for the rich, taking the sesame from the poor subsistence farmer for nothing (I won't go into all of the scams the rich folk there do in order to screw over the poor farmers) and selling great quantities of it to exporters and getting richer off the backs of the poor, but I didn't know that at the time.

I started sending the money every month via Western Union - I was happy to help. Then we went there to get married, I met everyone, saw their farm and started wondering why they weren't producing other items like watermelon, tomatoes, strawberries, onions, etc, which commanded prices way beyond that of sesame. Simpler answer: someone stole the pump to the well and they couldn't irrigate their crops. You don't have to irrigate for sesame and too much rain can be a problem for the crop, one of the reasons sesame is such a good crop for poor Paraguayan farmers. Simple fix: I bought them a pump for $1500 USD, about what they were making in a year and a half, instead of sending them $50 USD every month, then helped the father figure out the best way to irrigate and plant and maintain his crops. I didn't know anything about it at first but neither did he and a little research did wonders.

Damn, I must have had some ulterior motives, eh? A business man who comes down and employs people with a foreign company, paying them better than the local companies, and someone who actually takes the time to figure out what poor, needy people NEED instead of actually just giving them money (not even enough to maintain them) and perpetuating their poverty. Seems I must really hate poor people and all they stand for!

Don't you think the world would be better off if more people took personal responsibility for the life they see around them instead of forcing everyone else to do it at gunpoint? Doubtful, given your apparent dislike for business and foreign investors. It seems you think we're all ogres and not interested in helping anyone. I won't even bother to talk about who really creates jobs - seems maybe you think it's the "government" like many other people.

Personally, I think the world needs more people like me doing good deeds at a personal level, than people screaming to give the poor money in order to perpetuate their poverty, and incidentally maintaining a power base ad infinitum in the process. Kind of like Cristina was thinking to do with giving 16 year-olds and poor immigrants who were not yet citizens the vote.

Now, you may think my methods are incorrect, and that's fine, I have no problem debating you and maintaining a friendly relationship at the same time. But your making assumptions based on a few words you've seen me write, without asking for clarification, and then lumping me in with people who are truly abhorrent is a bit, well, unthoughtful - to be charitable.

And the reason the regulars agree is because they're Conservatives, too. That doesn't mean you're correct. It's called groupthink.

Ah yes, groupthink. Interesting that you think everyone here, except yourself and those who agree with you of course, desire harmony so badly that they are making dysfunctional decisions (or noises about decisions). I guess I influence the group so much that they can't think for themselves and wouldn't dare to argue with me for fear of disrupting the group harmony. Heh. I get arguments all the time, but rarely so condescending and dismissive as your comments (can't even call them comments or arguments really, but perhaps accusations would be more correct).

Nah, you're not even slightly "elite".

 

[baraka]

That Yahoo / Business Insider article is misleading.

a. The memo was about how Argentina would try to continue paying on the restructured bonds - which I think is 90% of the original bonds. In order to avoid payments sent to NY to the 90% who restructured being grabbed by the 10% who refused, there might need to be a revised payment method where the interest payments are made in Argentina to the bondholders and then the money is transferred abroad as private $ vs money of the Argentine govt, thus avoiding the ability of the 10% to grab those ongoing payments to the 90%. The tone of the article is that the Argentine govt is being shifty and weasley when in fact they are trying to figure out how to keep making payments to the 90% who restructured;

b. If Argentina loses to the holdouts, my understanding is that they will not only owe a large sum to the holdouts, but the clauses in the restructured 90% say that no one else can get a better deal, and if they do, they get the same deal....so they will owe 9X the amount that they would have to pay to the holdouts to the restructured group as well (anyone have more information on this ?);

c. I do think countries need to have some type of bankruptcy procedure for when they have a complete economic collapse as happened here 12 years ago. The holdouts clearly don't agree with that. Argentina believing there should be a way to restructure their debts after a collapse is not that absurd;

d. Most of the holdouts are hedge funds that bought up Argentine debt for pennies on the dollar. Even if they had accepted the restructured bonds, they would have made a large sum of money, but they wanted more. Even Prat-Gay has said that the terms on the restructured bonds were too favorable. I don't feel sorry for the holdouts at all;

e The Bloomberg quote from the memo which talks about Argentine wanting a default, means that if they lose to the holdouts, there will be a forced technical default as they will no longer be able to make payments to the restructured group without the money being grabbed by the holdouts. The quote from the memo is about restructuring the "payment mechanism", which as mentioned above, is in order to keep making payments to the restructured group, not actually default again ! It's all a lot less nefarious and more responsible than these articles are making it out, IMO. If Argentina refuses to pay in full the holdouts, but makes good on the payments to the other 90% by needing to revise where the payments are made, seems responsible to me.

 

[Chet]

I generally reply with Libertarian when asked about things like that, but I really don't care for the whole idea of labels. Once we label it, create a group we lose some of our individuality.
And others always have a set of preconceived notions about what a certain group thinks about X, won't matter if its true or not if you identify with group you are hung with the label.
Its positively lazy thinking.

 

[ajoknoblauch]

I generally reply with Libertarian when asked about things like that, but I really don't care for the whole idea of labels. Once we label it, create a group we lose some of our individuality.
And others always have a set of preconceived notions about what a certain group thinks about X, won't matter if its true or not if you identify with group you are hung with the label.
Its positively lazy thinking.

A good job of identifying why libertarianism is utterly untenable.

 

[Joe]

I generally reply with Libertarian when asked about things like that, but I really don't care for the whole idea of labels. Once we label it, create a group we lose some of our individuality.
And others always have a set of preconceived notions about what a certain group thinks about X, won't matter if its true or not if you identify with group you are hung with the label.
Its positively lazy thinking.

A good job of identifying why libertarianism is utterly untenable.

Non sequitur