Home Today's Paper Most Popular Video Gallery Photo Gallery
Subscription Blog Signin Register
Logo
Monday, December 11, 2017 06:16:01 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

International »

Chinese billionaire-in-exile wants regime change in Beijing


AFP, New York :Billionaire Guo Wengui, who is seeking asylum in the United States after accusing officials in his native China of corruption, wants "a change of the regime" in Beijing and the introduction of democracy in the world's most populous country."I want to try and to have rule of ...

Editorial »

Aman harvest has no effect on rice market


PASSING the Aman harvest, rice price has not come down as government leaders earlier said and rather gone up to the dismay of the common people all over the country. Though farmers are happy with higher price; although they have suffered production loss at many places due to late receding ...

Cricket »

Players of Comilla Victorians celebrating after dismissal of Chris Gayle of Rangpur Riders during the Qualifier-2 match of the AKS Bangladesh Premier League (BPL) Twenty20 Cricket between Comilla Victorians and Rangpur Riders at the Sher-e-Bangla National Cricket Stadium in the city's Mirpur on Sunday.


Sports »

Members of Rongdhanu RDS, the runners-up of the Hedayet Hossain Memorial Night Cricket Tournament pose for a photo session at Bangladesh Ground in Old Dhaka recently.


Entertainment »

Gauhar makes to sexiest Asian list for fourth consecutive time


For the fourth consecutive year, Bollywood actress and model Gauhar Khan has been voted to the top 10 list of ‘50 Sexiest Asian Women list’ in the world. It is an annual UK poll, which has been released in London recently. The actress, who is known for her choice of ...

City »

Convenor of Nagorik Oikya Mahmudur Rahman Manna speaking at a discussion organised by 'Mayer Dak, a social organisation at the Jatiya Press Club on Sunday with a call to bring back forced disappeared people to their mothers' laps.


International »

Ex-Fox news anchor Huddy claims Trump kissed her


Huff Post :A former Fox News anchorwoman who accused Bill O'Reilly of sexually harassing her in 2011 is now claiming that Donald Trump kissed her on the lips in an elevator.Juliet Huddy said Thursday morning on the "Mornin!!! With Bill Schulz" podcast (which has a paywall) that it happened around ...

Editorial »

Dust pollution takes toll in cities’ air


PRESENCE of dust and pollution in the air of our cities has reached alarming levels. It's happening mainly due to chaotic construction works, poor management and protracted traffic jams. According to Air Quality Index Report of the Department of Environment's (DoE) "Clean Air and Sustainable Project" earlier this month, air ...

Sports »

Chanchal emerges unbeaten champion in Blitz Chess Championship


BSS, Dhaka  :Chanchal Kumar Ghosh emerged as unbeaten champion in the Blitz Chess Championship with 6.5 points after the 7th round game on Friday at E Commerce Club hall room in Uttara. Five players finished in second to sixth position with 5.5 points after the tie breaking system. They are ...

Sports »

First-place Nao Kodaira (center) of Japan stands with second-place Lee Sang-hwa (left) of South Korea and third-place Arisa Go (right) of Japan after the women's 500 meters at a World Cup speedskating event Friday in Kearns, Utah.


Entertainment »

Akshay to back out of Gulshan Kumar's biopic?


 Akshay Kumar, who has films like Padman and 2.0 lined up for 2018, has created a stir after rumors of him stepping out of the film titled Mogul came to the forefront. Mogul is a biopic on the creator of T-series, Gulshan Kumar. According to the rumors, Akshay Kumar and ...

City »

BNP Secretary General Mirza Fakhrul Islam Alamgir, among others, at a discussion organised on the occasion of 10th founding anniversary of Bangladesh Kalyan Party at the Jatiya Press Club on Saturday.


Editorial »

Mysterious theft of fertiliser from Govt depots


DESPITE fertile land loss, inclement weather and depleting irrigation water, Bangladesh's agriculture keeps contributing a fifth of the GDP each year. Along with other factors, government's policy support in the form of fertiliser subsidy plays a big part here. But misappropriation of the key agro input such as fertiliser by ...

City »

`National Committee for the Implementation of Prime Minister`s Approved Gazetted Salaries` formed a human chain in front of the Jatiya Press Club on Friday to meet its demands.


.

Entertainment »

Are Virat and Anushka getting hitched?


Over the past few days, there are some reports doing the rounds that ace cricketer Virat Kohli and Bollywood starlet Anushka Sharma are getting married. According to these reports, both these love-birds will tie the knot in Italy.  The manager of Anushka has already slammed these reports by saying these ...

 
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