S.&P. Says Argentina Has Defaulted

[n2doc]

Source: NYT

The ratings agency Standard & Poor’s has found that Argentina has defaulted after it failed to make a $539 million interest payment due on its discount bonds.

The action came Wednesday afternoon as representatives for the country and New York hedge funds sought to reach a last-minute agreement on Argentina’s debt. Yet after more than five hours of mediated talks on Wednesday, neither side appeared closer to a deal.

Late Wednesday, the court-appointed mediator to the talks, Daniel A. Pollack, said, “Unfortunately, no agreement was reached and the Republic of Argentina will imminently be in default.”


Read more: http://dealbook.nytimes.com/2014/07/30/s-p-says-argentina-has-defaulted/

[DeSwiss]

1. Argentina!

- Watch out for the repo man! They come armed......

K&R

[Fortinbras Armstrong]

2. So buying Argentinian bonds is probably not a good idea at this time.

[Adrahil]

3. I'm guessing the next bond issue won't go very well..... NT

[quadrature]

4. could a whole country be repo-ed

Hollywood seems to be asleep on this one

[rdking647]

5. argentina should announce that they will be making the 539m payment

but not using american banks. they tried to make the payment but a hedge fund that bought defaulted bonds cheap got a us court to block a us bank from making the payment unless the defaulted bonds were paid in full.

announce that the payments will be made by an argentinian bank. transfer the monet to the argentinian bank and then pay it.
then pass a law making it illegal for argentina to pay the hedhe fund 1 penny.

current bondholders get paid
hedge fund gets squat

[whatthehey]

6. They will have to go back to raiding their pension fund for money; if that has any left that is

The predictable cheering for Argentina's thumbing its nose at the global financial giants around here was always based on the naive assumption that they could keep funding deficits ad infinitum, but you can't. Not without paying your bills. The US has debt going back a century, but can get as much more as it likes for <3.5% because investors know they'll be paid. Argentina avoided having to go cap in hand for a while by spending the money they promised to future pensioners, then started borrowing externally, and now can't pay that back. International bankers may well be feckless bastards, but bloody stupid they are not and lending to deadbeats who won't pay is bloody stupid. So borrowing is going to become very difficult and ruinously expensive for Argentina, as is paying back their retirees. Of course the US has borrowed from SSI too, but see above; no problem if you keep paying it back. Their only alternatives are to print their way out of it and bring back the Weimar wheelbarrows, or get their deficits in hand pronto with either hefty tax increases, painful spending cuts or likely both.

[Amonester]

8. I don't know, but do they tax their rich assholes there more than in the rest of the ...

predatorian - uh, capitalist - world?

Or are their own Rapacious 0.001% get away with yearly tax refunds without paying taxes to begin with?

Just asking.

[whatthehey]

11. Dunno in detail

In basic scope individual taxes are much like ours, with marginal rates from 9-35%. Much higher VAT at 21% but often those are easy to avoid by having a personal "business" and running expenses through that. Obviously you'd need a local tax guru to discuss how easy/hard tax avoidance is. There would seem to be room to jack up that 35% a bit and I hope that's their main response to needing revenue and costs to come in line, because promising 60% pay raises for cops and fighting 26% real inflation while your currency is set to tank by about half is no easy task without closing that deficit...

[COLGATE4]

10. Thank you for bringing some much-needed

facts into the previously feel-good discussion about how poor Argentina was going to stick it to those damned vultures. This default will put them between a rock and a hard place for a long time to come.

[christx30]

7. Hey Christina!

Since things are going badly, how's about another rousing game of "Distract from our troubles by bringing up the Faulklands"? It's much better than actually trying to fix problems.

[COLGATE4]

9. You can count on it. nt

[griloco]

12. Maybe Argentina should look elsewhere.....

http://nypost.com/2014/07/20/in-snub-to-u-s-argentina-turns-to-china-ahead-of-default/

[conservaphobe]

13. Doesn't sound like things are going too well for them.

Not the utopia some claim, I suppose.

What a surprise.

[JI7]

14. isn't the pope from there ? can't he do anything to help out ?