Home Today's Paper Most Popular Video Gallery Photo Gallery
Subscription Blog Signin Register
Logo
Saturday, March 23, 2019 03:13:31 AM
Follow Us On: Facebook Twitter Twitter Twitter Twitter

Venture funds: Argentine experiences

By
10th-Aug-2014       
Comments
Share your thought
Post a comment »
Read all () »

Alan Furth :
It is easy to see moral irony in the arguments of those who support Argentina's President Cristina Fernandez de Kirchner's government in the ongoing dispute against a group of so-called vulture funds, led by the highly litigious Elliot Associates. Anyone even slightly familiar with the corrupt shenanigans of Fernandez, her late husband - former president Nestor Kirchner - and their cronies over the last 11 years is entitled to roll their eyes at claims that the interests of the Argentine people motivate Fernandez's government to resist the vulture funds' attempt to get paid in full for bonds the country defaulted on in 2002 (the largest debt default the world had ever seen until then - surpassed only by Lehman Brothers in 2008).
Egregious as the recent past of the Kirchner administration is, what truly adds insult to injury is the Kirchners' earlier history. During the mid 1970s, Fernandez and her husband established a law firm in Rio Gallegos, in the Patagonian province of Santa Cruz. The firm thrived during those years, especially right after a sharp devaluation of the peso in 1980 caused by the disastrous economic policies of the military junta ruling the country at the time. When inflation-indexed rates on mortgage loans soared to sky-high levels, forcing desperate debtors to sell their homes at fire sale prices, the Kirchners cashed in handsomely, enforcing evictions on behalf of several financial houses and banks.
The methods they used for this purpose could easily be classified as "vulturesque." Lawyer Rafael Flores - a fellow Peronist who would become one of the Kirchners' main detractors during the '90s - took up the case of Mrs. Ana Victoria de Aaset, a distressed mortgage-holder who successfully sued the Kirchners for allegedly keeping Asaet's promisory notes rather than shredding them after payment. When Flores ran onto Fernandez right ouside the courtroom and asked her why she and her husband were doing this, she famously answered: "We want to get into politics, and for getting into politics, we need some serious dough." Tony Montana couldn't have said it better.
Sadly, Fernandez's domestic political opponents, who include most local mainstream libertarians, have pathetically sided with the vulture funds, engaging in one of the most outrageous exercises of false free-market rhetoric the country has seen ever since the Menem years.
Their arguments amount to nothing more than crass rehashes of the well-PR'd statements championed by Elliot's Paul Singer and others at the hedge fund community. As Jim Armitage put it in a recent article at The Independent: "The vultures argue that, were it not for the threat of relentless and unflinching court room battles, tinpot dictators, kleptocrats and plain old irresponsible populist leaders have nothing to prevent them racking up huge debts, wasting (or stealing) the money, and then disappearing off into the distance."
The most outrageous fallacy in this line of reasoning is the conflation of the political class of a country with its citizenry at large. Whenever vultures succeed in collecting the full value on defaulted government bonds, the ones who end up paying are, obviously, the taxpayers, the general citizenry of a given country. The local politicians who borrowed the money in the name of the people, obtaining enormous personal financial gains in process, won't contribute to paying those debts any more than the regular Joe who does real work for a living. How can anyone in their right minds think that will discipline the political class into fiscal frugality of any kind? How can anyone claiming to defend any minimally substantive notion of human freedom advocate for socializing the losses of creditors who lend to corrupt, unaccountable governments, effectively subjecting the common people to government-debt peonage on behalf of crony financial operators?
Actually, many "free-market," pro-Elliot pundits are so eager to counter Fernandez's government at any cost that they end up defending Judge Griesa's bizarrely heterodox interpretation of the pari passu clause in sovereign bonds. As financial blogger Felix Salmon recently pointed out, the clause "is a piece of hoary financial boilerplate that means absolutely nothing in a sovereign context."
The traditional interpretation of pari passu by market players in international financial transactions is that it prevents the borrower from incurring obligations to other creditors that rank legally senior to the debt instrument containing the clause. Outside the framework of typical corporate-bankrupcy proceedings, the notion that a pari passu clause implies that equally-ranking debt must be paid equally is an utter fallacy.
No one with a minimum of common sense and intellectual honesty should portray financial operators specialized in extracting rents through unscrupulous legal manipulation as if they were free-market players seeking to enforce fair contractual terms - especially not those who call themselves "libertarians."

Tariff
Add Rate

News Archive

Inside The New Nation

Editorial »

Save Halda from dying


DEPARTMENT of Environment has revealed that waste from a housing estate and some factories are polluting the Halda river in Chattogram to the extent that it caused dying of fish. Currently, the pollution of the Halda is severely affecting the livelihood of adjacent people, in particular the fishermen. In June ...

International »

Prince Charles heads to Cuba amid US tensions


AFP, Havana :Britain's Prince Charles and his wife Camilla will make the first royal visit to communist-run Cuba on Sunday at a time when ally Washington is seeking to ramp up sanctions against the island.The 70-year-old prince was asked by the British government to add Cuba to a long-planned tour ...

Football »

US beat Ecuador 1-0 in int’l friendly soccer


AP, Orlando :Gregg Berhalter's vision for the U.S. national team started to unfold as the Americans passed the ball from side to side, played diagonal balls long and short. Possession is his key to success.The style was more pleasing. But the only goal of night was pretty weird.Gyasi Zardes's shot ...

Entertainment »

Homayra Himu wants to give direction


Sheikh Arif Bulbon :Five years ago, popular TV actress Homayra Himu produced a telefilm titled Bhalobashi Othoba Bashi Bhalo. But producing that telefilm she faced financial crisis during that time. She was sufferer for this and later decided not to produce any work. But she is interested to give direction ...

Sports »

Russia's Natalia Zabiiko and Alexander Enbert perform their pairs free skate during the ISU World Figure Skating Championships at Saitama Super Arena in Saitama, north of Tokyo on Thursday.


Football »

Trinidad and Tobago's Aubrey David (left) and Wales' Ryan Hedges battle for the ball during the International Friendly soccer match between Wales and Trinidad and Tobago, at the Racecourse Ground, in Wrexham, Wales on Wednesday.


Entertainment »

Deepika Padukone checks all ticks in list over a week


Bollywood’s leading lady Deepika Padukone has had an eventful last week as the actress unveiled her prestigious Statue of Purpose at Madame Tussauds and graced the Vogue International cover as the Global Talent. Both the events are key and one of the major highlights in the life of the actress. ...

City »

Holi festival celebrated with enthusiasm, fanfare


Thousands of devotees on Thursday celebrated the Holi, a Hindu religious festival of colours, across the country with due religious fervour and much enthusiasm."Marking the festival, a large number of devotees thronged the Dhakeswari National Temple in the morning to offer abir, a pink colored powder, at the foot of ...

Editorial »

Europe`s worst genocide and Karadzic`s life imprisonment


IT'S another symbol of justice against a 'genocide' that had committed about 25 years ago by a powerful European ruler; Radovan Karadzic. The 73-year former Bosnian Serb leader has been awarded life imprisonment for his crimes in the war that broke-up his country in 1990. UN judges in The Hague ...

Business & Economy »

Vivo launches V15 with 32 MP Pop-Up Selfie camera


Business Desk :Vivo, the innovative global smart phone brand, launched the long-awaited smart phone V15 after it's pro version V15 Pro was unveiled in Bangladesh last month. The Vivo V15 packs a 32 megapixel pop up selfie camera, a powerful triple rear camera set-up, stunning Ultra Full-View display 6.53 inch ...

International »

NZ bans sale of assault gun, semi-auto rifles


 AFP, Wellington :New Zealand Prime Minister Jacinda Ardern announced an immediate ban on the sale of assault rifles and semi-automatics Thursday in a muscular response to the Christchurch terror attack that killed 50 people."Today I am announcing that New Zealand will ban all military-style semi-automatic weapons. We will also ban ...

International »

EU chief says Brexit delay possible if MPs approve deal


The EU could approve Britain's request for a short delay to Brexit but only if UK MPs next week vote through the withdrawal deal they have twice rejected, European Council president Donald Tusk said Wednesday.With nine days to go before Britain is due to leave the bloc, the country is ...

Business & Economy »

Bolsonaro to visit Trump to firm up conservative alliance


AFP, Brasilia :Brazil's far right President Jair Bolsonaro will meet US counterpart Donald Trump next week to strengthen ties in the nascent regional conservative alliance aiming to ramp up the pressure on Venezuela's Nicolas Maduro.After decades of fractious relations between Brasilia and Washington, things have improved with the assumption to ...

Entertainment »

Romeo Akbar Walter celebrates unnoticed people: Mouni Roy


Actress Mouni Roy, who will be seen in the forthcoming film Romeo Akbar Walter, says the espionage thriller celebrates the unnoticed people who have sacrificed their lives for the love of their country. Romeo Akbar Walter is set against the backdrop of the India-Pakistan War of 1971. In the film, ...

Entertainment »

Biased towards TV but enjoy digital: Sakshi Tanwar


Actress Sakshi Tanwar, who has featured in a web series titled The Final Call, says she is biased towards television but has started enjoying working in the digital platform as it gives an opportunity to actors to experiment in a lesser period of time.  “I feel every medium is different. ...

 
Items that you save may be read at any time on your computer, iPad, iPhone or Android devices.
 
Are you new to our website? Do you have already an account at our website?
Create An Account Log in here
Email this news to a friend or like someone
Email:
Write a comment to this news