Home Today's Paper Most Popular Video Gallery Photo Gallery
Subscription Blog Signin Register
Logo
Wednesday, July 24, 2019 01:14:05 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

City »

'Aparajeya Bangladesh' formed a human chain in front of the Jatiya Press Club on Tuesday demanding release of BNP Chief Begum Khaleda Zia.


Editorial »

Check mob beating


IN the last six months, 36 people were killed by mobs. In the last five days, eight, including two women, were killed and at least 30 others were injured. Shockingly, many of the victims were intellectually challenged. Mob attacks on people labelling victims "child kidnappers" continue unabated despite several directives ...

Sports »

Tokyo 2020 comes too early for karate kid's Olympic dream


AFP, Nagaoka :Sweat pours off Mahiro Takano as the 13-year-old karate black belt trades blows with a grown man almost twice her size, finishing with a blood-curdling roar, then a dainty bow.The petite schoolgirl is used to punching above her weight - since taking up karate in kindergarten she has ...

International »

Pope urges concrete measures to protect Syrian civilians


AP, Vatican City :Pope Francis has sent Syrian President Bashar Assad a letter expressing his "profound concern" for the humanitarian situation in Syria and in particular the plight of civilians in Idlib province.The Vatican said Cardinal Peter Turkson, one of Francis' top advisers, hand-delivered the letter to Assad during a ...

International »

Trump praises Pakistan's role in ‘progress’ on Afghan peace


President Donald Trump on Monday hailed Pakistan's help in advancing peace talks in Afghanistan, a marked shift in tone as the United States seeks an accord with the Taliban to end almost 18 years of war.Speaking from the Oval Office alongside Pakistan's Prime Minister Imran Khan, Trump also warned he ...

Business & Economy »

Abdul Aziz, Additional Managing Director of Shahjalal Islami Bank Ltd and Naimul Huda, General Manager of Finance & Accounts of Incepta Pharmaceuticals Ltd, exchanging an agreement signing document at bank's corporate office in the city on Tuesday. Bank's Managing Director M Shahidul Islam, Deputy Managing Directors M Akther Hossain, Mian Quamrul Hasan Chowdhury and Imtiaz U Ahmed, among others, were present. Under the deal, all employee of the company can open their bank account in the bank without keeping any initial deposit and will enjoy other Banking facilities.


Entertainment »

Jacqueline opens up about launching her Youtube channel


One of the most influential celebrities of Bollywood Jacqueline Fernandez who is not only a sought after name for her commercially successful films but is also is huge name in the brand circuit. Having recently crossed 30 million followers on instagram, owing to humongous fan following across quarters, Jacqueline Fernandez ...

Entertainment »

Sonia disappearing from media


Entertainment Report :Sonia Hossain once tried to establish her career in different platforms of media like modelling, acting and hosting. Bad temperament, high ambition and self announced talent made her unsuccessful media personality. As a result, her presence in media is not mentionable now. In fact, Sonia was absent from ...

Editorial »

Stand beside flood-hit people


DIFFERENT kinds of waterborne diseases have begun spreading as floodwater started receding across the country. But in the post-flood scenario, many people are suffering from diarrhoea, skin diseases, dysentery, cholera and other waterborne diseases. Officials of the Flood Forecasting and Warning Centre said the flood situation may continue improving in ...

Sports »

Lowry weathers storm to win British Open and first major


Ireland's Shane Lowry withstood howling wind and rain to win his first major at the British Open by six shots from Tommy Fleetwood on Sunday, describing the achievement as "an out-of-body experience".In desperately difficult conditions, Lowry's one-over par final round was still more than enough as he finished on 15-under ...

International »

UK leadership favourite Johnson hits more turmoil on last voting day


AFP :Britain's leadership contest entered its finale Monday with the favourite Boris Johnson facing more defections from ministers over his Brexit plan.The month-long contest between former London mayor Johnson and Foreign Secretary Jeremy Hunt is being decided by fewer than 200,000 grassroots members of the governing Conservative Party.The winner will ...

International »

Zelensky party heads for absolute majority in Ukraine


AFP :Ukraine's comedian-turned-president Volodymyr Zelensky is set to control an absolute majority in parliament, ushering in a generational shift in the ex-Soviet country's political arena.The 41-year-old became Ukraine's youngest ever post-Soviet leader when he took office two months ago and has promised to stamp out corruption and end a separatist ...

City »

Prime Minister Sheikh Hasina presenting National Fisheries Award to Mostofa Al Rajib, Upazila Fisheries Officer, Betagi , Barguna for the latter's contribution in Fisheries Sector at a ceremony held recently in the auditorium of Krishibid Institution, Bangladesh in the city on the occasion of National Fisheries Week.


Entertainment »

Mamo under Tauquir’s direction, Bipasha’s story


Sheikh Arif Bulbon :As an actress, in the beginning of her career, Zakia Bari Mamo got the National Film Award to act in Tauquir Ahmed-directed movie Daruchini Dwip. For this reason, Mamo always respects to Tauquir Ahmed. Now she is a matured actress who always wants to work in challenging ...

Editorial »

Taking law in own hand is an ominous sign


MOBS beat to death five people, including two women, and injured 10 others on suspicion of being child kidnappers across the country on Saturday. The incidents happened just a day after three people were beaten by a mob in Thakurgaon. Incidents of mob beating have increased even after the Bridges ...

 
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