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Argentina's debt fight: What it is, why it matters
Topic Started: 2 Jul 2014, 09:41 PM (5,228 Views)
peter fraser
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Argentina's debt fight: What it is, why it matters
Monday, 30 Jun 2014 | 8:00 AM ET
The Associated Press
LINK
Time to resolve Argentina's long battle with creditors is running out.

Argentina owes an interest payment to the majority of its creditors on Monday, though the government has a 30-day grace period after that to avoid going into another catastrophic default.

Last week, the U.S. Supreme Court ruled against Argentina, letting stand a lower court ruling that it must pay off hedge funds that own bonds left over from the country's default in 2001. President Cristina Fernandez has said Argentina couldn't afford to pay them while also making regular interest payments to other lenders.

On Friday a federal judge pleaded with Argentina to continue negotiating with the hedge funds. At the same time, the judge called Argentina's attempt to make its regular interest payment illegal.

One misstep and Argentina could slide into another default, thirteen years after a record $100 billion default devastated its economy.


Just how did Argentina wind up in this mess? And why is a U.S. court telling another country what to do?

LINK
Any expressed market opinion is my own and is not to be taken as financial advice
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newjez
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peter fraser
2 Jul 2014, 09:41 PM
Argentina's debt fight: What it is, why it matters
Monday, 30 Jun 2014 | 8:00 AM ET
The Associated Press
LINK
Time to resolve Argentina's long battle with creditors is running out.

Argentina owes an interest payment to the majority of its creditors on Monday, though the government has a 30-day grace period after that to avoid going into another catastrophic default.

Last week, the U.S. Supreme Court ruled against Argentina, letting stand a lower court ruling that it must pay off hedge funds that own bonds left over from the country's default in 2001. President Cristina Fernandez has said Argentina couldn't afford to pay them while also making regular interest payments to other lenders.

On Friday a federal judge pleaded with Argentina to continue negotiating with the hedge funds. At the same time, the judge called Argentina's attempt to make its regular interest payment illegal.

One misstep and Argentina could slide into another default, thirteen years after a record $100 billion default devastated its economy.


Just how did Argentina wind up in this mess? And why is a U.S. court telling another country what to do?

LINK
Do you think this will be contained Peter?
Whenever you have an argument with someone, there comes a moment where you must ask yourself, whatever your political persuasion, 'am I the Nazi?'
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peter fraser
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newjez
3 Jul 2014, 06:31 AM
Do you think this will be contained Peter?
It's a strange one. This dates back to past decades when Argentine borrowed in US dollars which is a silly thing to do. Their Peso was fixed to the dollar.
http://modernmoney.wordpress.com/2011/01/31/argentina-inflation-due-to-pegged%C2%A0currency/


Almost all of the creditors accepted a deal but Singer bought some bonds and took Argentina to a US court who ruled in his favour, so the court ordered that Argentina had to make the debt (that he bought at a discount) whole.

I don't know - Argentina might just tell the US court to take a hike and default. It seems to have been one of the more memorable failures of the IMF and there have been quite a few.

Right now I think that Argentina are more interested in the World Cup than this fiasco.
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Gossamer
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Argentina defaults.

http://www.bloomberg.com/news/2014-07-29/how-argentina-s-default-may-trigger-29-billion-in-claims.html
Common sense is a curse - those who have it need to suffer dealing with those who don't have it.

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Nelson
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Dam
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Gossamer
31 Jul 2014, 11:42 AM
no,
they still have few other options, one of them is for their banks to buy the debt from those pesky bondholders, and then wait until 2015 to repay their banks with triggering a whole mess ( same repayment for all bondholders).
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Gossamer
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http://www.marketwatch.com/story/argentina-creditors-fail-to-reach-deal-2014-07-30
Common sense is a curse - those who have it need to suffer dealing with those who don't have it.

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Nelson
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o2sd
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Looks like Argentina ran out of Pesos. Maybe the Central Bank is still running Windows 95 and couldn't handled a deposit of 325 billion pesos in the government's account and they got a blue screen of death.

A currency issuer can't run out of it's own currency. Right? Right?
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peter fraser
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o2sd
31 Jul 2014, 08:15 PM
Looks like Argentina ran out of Pesos. Maybe the Central Bank is still running Windows 95 and couldn't handled a deposit of 325 billion pesos in the government's account and they got a blue screen of death.

A currency issuer can't run out of it's own currency. Right? Right?
Their debts were not in Peso's
Any expressed market opinion is my own and is not to be taken as financial advice
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o2sd
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peter fraser
31 Jul 2014, 08:22 PM
Their debts were not in Peso's
Yes, but their currency is convertible. Print more pesos, buy more dollars. Peso goes down, inflation goes up, debts get paid. Not hard.
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K-town
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o2sd
31 Jul 2014, 08:50 PM
Yes, but their currency is convertible. Print more pesos, buy more dollars. Peso goes down, inflation goes up, debts get paid. Not hard.
Oh ffs, are you serious?
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