Tuesday, November 20, 2012

Why Argentina refuses to pay hedge funds




From globalpost: Here's what you have to understand: Argentina isn't refusing to pay angry hedge fund managers like Elliott Capital's Paul Singer because they don't have the money. They do.  The country's intransigence comes from a force far more powerful than that — the fabric of their modern political ideology.

In case you've missed this epic fight, for the last ten years, Argentina has refused to pay Elliott Management's Paul Singer and other exchange bondholders of their sovereign debt who did not participate in restructurings and take a haircut.  Singer, for his part, has dauntlessly chased his money, even getting the Ghanaian government to impound an Argentine naval vessel, the ARA Libertad, as collateral.  Last month, New York Judge Thomas Griese ordered Argentina to pay Singer and fellow investors something through some kind of payment plan. The country has appealed the decision, but its not looking good for them.

So the question remains — why not just figure out a deal and pay Singer the $1.3 billion he's owed and be done with it?n  Because, according to Argentine political ideology in the era of the Kirchners, paying investors like Singer is a serious affront to the country's national sovereignty….

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