Home Today's Paper Most Popular Video Gallery Photo Gallery
Subscription Blog Signin Register
Logo
Saturday, September 21, 2019 11:39:54 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 »

Breathing the worst air in Dhaka


THE Air Quality Index (AQI) on Thursday morning showed that Dhaka's air quality was the second-worst in the world. Dhaka had a score of 190 at 8:21am, indicating that the quality was unhealthy. When the AQI value is between 101 and 200, there is an increased likelihood of adverse effects ...

City »

Natun Dhara Bangladesh formed a human chain in front of the Jatiya Press Club on Friday with a call to ban casino business.


.

Entertainment »

Jhumu Khan will return to music any time


Sheikh Arif Bulbon :Jhumu Khan is a professional doctor. Before becoming doctor she started her career in music. In 1994, her first solo album titled Chondrima Raatey was released. A song of that album titled Pan Khaite Chun Lagey got popularity during that time. Composed by Manam Ahmed Hasan Motiur ...

International »

Pompeo favours 'peaceful resolution' to crisis after Saudi oil attack


AFP, Dubai :The US wants a peaceful solution to the crisis sparked by attacks on Saudi oil installations, Secretary of State Mike Pompeo said Thursday, after Iran raised the spectre of "all-out war".Pompeo has blamed Iran for the dramatic weekend assault on two facilities, condemning an "act of war" which ...

Front Page »

2 Rohingyas among 3 'criminals' killed in C'bazar gunfight


UNB, Cox's Bazar :Three suspected criminals, including two Rohingyas, were killed in a reported gunfight with police at Baharchhara in Teknaf upazila early Thursday.The deceased were identified as Mohammad Jamil, 20, son of Fazal Ahmed; and Asmat Ullah, 21, son of Nabi Hossain of Ukhiya's Balukhali camp; and Mohammad Rafique, ...

Sports »

Timea Babos of Hungary, returns a shot to Karolina Muchova of the Czech Republic, during their second round match of the Korea Open tennis championships in Seoul, South Korea on Thursday.


International »

UK, US discuss need for united diplomatic response to Saudi attack


Reuters, London :British Prime Minister Boris Johnson and U.S. President Donald Trump condemned last weekend's attack on Saudi Arabian oil facilities and discussed the need for a united diplomatic response in a telephone call on Wednesday, Mr Johnson's office said."They condemned the attacks and discussed the need for a united ...

International »

US senators urge Trump to end nuclear talks with Saudi Arabia


Reuters, Washington :Two Democratic U.S. senators on Wednesday urged Trump administration officials to halt talks with Saudi Arabia on building nuclear reactors after weekend attacks that halved the country's oil output and increased instability in the Middle East.U.S. Energy Secretary Rick Perry told reporters on Tuesday at a nuclear power ...

Editorial »

Investors losing interest in stock market


THE government's recent measures to prop up the stock market appear to have failed as the unusual fall of share prices continues to rattle investors. The DSEX, the benchmark index of Dhaka Stock Exchange, slumped to a 33-month low to 4,888 points on Wednesday, losing 533.61 points or 9.84 percent ...

Entertainment »

Farhana Mili in role of judge


Entertainment Report :Farhana Mili is a noted actress of the small screen. Basically she won the hearts of so many viewers to work in movie Monpura. After acting in this movie, she only engaged herself with acting only in the small screen. Sometimes Mili is seen to perform as a ...

Cricket »

England cricket chiefs back Ben Stokes in family tragedy story row


England cricket chiefs on Tuesday rallied round star all-rounder Ben Stokes after he criticised a British newspaper report about a family tragedy more than 30 years ago.Tom Harrison, chief executive of the England and Wales Cricket Board (ECB), said he was "disgusted and appalled" by the front-page story in The ...

Editorial »

Needs sustainable solution to Rohingya crisis


THE Ministry of Foreign Affairs on Tuesday informed the Parliamentary Standing Committee on the same ministry that Dhaka is planning to take Myanmar to the International Court of Justice and the International Criminal Court for its repression on the Rohingyas. The Foreign Ministry also informed that Bangladesh would also take ...

International »

Iran's President says Yemenis attacked Saudi oil sites as 'warning'


By Agencies :Iran's President Hassan Rouhani said Wednesday that Yemenis targeted Saudi oil installations as a "warning" about a possible wider war in response to the kingdom's US-backed intervention in their conflict-ravaged country."The Yemenis… haven't hit a hospital, they haven't hit a school, they haven't hit Sanaa bazaar. They just ...

International »

Do not underestimate no-deal Brexit, EU's Barnier warns


Reuters, Strasbourg  :The European Union's chief Brexit negotiator warned on Wednesday not to underestimate the consequences of any no-deal Brexit and said issues raised by Britain's exit from the EU would still need addressing before a future relationship could be agreed."I advise everyone not to underestimate the consequences, clearly for ...

Entertainment »

Kareena’s simplistic look comes with a price tag of Rs75K


Kareena Kapoor Khan aka Poo is always ready to ‘woo’ us with her amazing fashion and style. Time and again the actress has proved her fashion statement by giving major goals to many. Her latest girl next door look is one of the looks which every girl would wish for. ...

 
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