Home Today's Paper Most Popular Video Gallery Photo Gallery
Subscription Blog Signin Register
Logo
Wednesday, September 19, 2018 02:29:45 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 »

We welcome Islamabad for awarding Bangladeshi-origin refugees Pakistan`s nationality


PAKISTAN government has decided to grant nationality to all Pakistan-born refugees of Bangladeshi and Afghan origins staying there for decades. Prime Minister Mr Imran Khan on Sunday made this announcement during his maiden visit to Karachi, saying the Bangladeshi and Afghan refugees who were born in Pakistan would get National ...

Sports »

Argentina's Facundo Conte (left) and teammate Alexis Gonzalez celebrate during the Men's World Championships' volleyball match between Argentina and Slovenia, in Florence, Italy on Monday.


Football »

FIFA president Infantino has doubts about La Liga match in Miami


AFP, Barcelona :FIFA president Gianni Infantino has expressed concern about La Liga's proposal to stage a fixture between Girona and Barcelona in the United States.The two clubs have each approved a request submitted to the Spanish Football Federation for the match to be played at the Hard Rock Stadium in ...

Entertainment »

Annie Sekhon all set to shine in Bollywood


Actress Annie Sekhon who has worked in many television shows and Punjabi films is having the time of her life. Off late she's been enjoying the success of her latest Punjabi film, 'Punjab Singh' opposite Gurjind Maan. The hangover of this film hasn't even faded yet and she's taking a ...

Entertainment »

2018 Emmy winners list


Best Drama Series: Game of ThronesBest Comedy Series: The Marvelous Mrs. MaiselBest Actor, Drama Series: Matthew Rhys, The AmericansBest Actress, Drama Series: Claire Foy, The CrownBest Supporting Actor, Drama Series: Peter Dinklage, Game of ThronesBest Supporting Actress, Drama Series: Thandie Newton, WestworldBest Writing, Drama Series: Joel Fields and Joe Weisberg, ...

Business & Economy »

Md. Momin Ud Dowlah, Chairman and Managing Director of Eon Group of Industries Limited, inaugurating its 18th anniversary celebrating programme by cutting cake at Eon Convention Center in the city on Sunday. Major ABA Mesbah Ud Dowlah, Vice-Chairman, ABA Shahid Ud Dowlah, Executive Director, Sayeeda Dowla, Director and Dr. Tamim Ud Dowlah, Group Director were also present.


City »

BNP Standing Committee Member Barrister Moudud Ahmed speaking at a discussion on 'Voting Rights-Fair Justice and Human Rights: Present Bangladesh' organised by Bangladesh Jatiya Manobadhikar Parishad at the Jatiya Press Club on Tuesday.


International »

US slashes refugee admissions to 30,000 for 2019


Reuters, Washington :U.S. Secretary of State Mike Pompeo said on Monday the United States would cap the number of refugees allowed into the country at 30,000 for fiscal year 2019, a sharp drop from a limit of 45,000 it set for 2018."We proposed resettling up to 30,000 refugees under the ...

Editorial »

Journalists` concern for free speech should not be ignored


EDITORS' Council on Saturday expressed its surprise, dissatisfaction, and shock at the final report of a parliamentary standing committee on the draft Digital Security Act which totally ignored the concerns expressed by journalists. Following disapproval from journalists, rights campaigners and foreign diplomats in Dhaka, the Law Minister earlier had admitted ...

Sports »

Japan's Osaka blames US Open tears on 'notorious' nerves


AFP, Tokyo :Naomi Osaka has put her US Open tears down to shredded nerves and her natural awkwardness, rather than the tantrum thrown by Serena Williams that overshadowed a historic Japanese win.The 20-year-old melted hearts when she burst into sobs as boos rang out following her emphatic 6-2, 6-4 thrashing ...

International »

Floodwaters rise as killer storm stalks southeastern US


AFP :Catastrophic floods raised the threat of landslides and dam failures across the southeastern United States on Monday, prolonging the agony caused by a killer hurricane that has left more than a dozen people dead and caused billions of dollars in damage.Downgraded to a tropical depression, Florence crept over South ...

International »

Imran Khan pledges citizenship to Afghan and Bangladeshi refugees


Al Jazeera News :Karachi, Pakistan - Prime Minister Imran Khan has pledged to implement existing Pakistani laws that would grant citizenship to all Afghan and Bangladeshi refugees who were born on Pakistani soil, a major departure from previous policy.Pakistan is home to more than 1.39 million registered Afghan refugees, according ...

City »

BNP Standing Committee Member Barrister Moudud Ahmed speaking at a protest rally organised by Nasir Uddin Ahmed Pintu Smriti Sangsad at the Jatiya Press Club on Monday demanding release of BNP Chief Begum Khaleda Zia and other leaders of the party.


Entertainment »

Radhika Apte turns adviser for AndhaDhun director


AndhaDhun director, Sriram Raghavan holds Radhika’s opinion in high regard when it comes to working on a project. Radhika being an omnipresent character in the entertainment world, the filmmaker feels that seeking advice from the actress always works in favor of him. According to sources, Sriram Raghavan said, “Since Radhika ...

Editorial »

DUCSU election is desirable but subservient party politics must end


ACADEMICS and former student leaders have emphasised favourable environment and immediate announcement of schedule to hold the long-awaited election to Dhaka University Central Student Union (DUCSU). While Dhaka University authorities initiated a discussion with student organisations over the issue yesterday, the participants welcoming the DU's move pointed out that flexing ...

 
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