What are the consequences of a $16 trillion dollar
debt; a president who can’t get a single legislator to vote yea for one of his
budgets in 4 years; and a Senate that has also refused to pass the same during
the tenure of aforementioned president?
Argentina is the answer to that question. Last week, a U.S. federal court ruled in favor
of a plaintiff over a debt:
Argentina is refusing to budge in its billion-dollar debt showdown
in New York federal court, preparing an appeal Monday that it hopes will stave
off another devastating default.
Judge Thomas Griesa left Argentina without any wiggle room,
ordering the government of President Cristina Fernandez to pay $1.3 billion
into an escrow account for the so-called "vulture funds" by Dec. 15,
even as it pursues its final appeals.
If Argentina pays the plaintiffs, then lawyers representing other
holders of defaulted debt, totaling more than $11 billion, are expected to
demand immediate payment as well.
If it refuses, the judge said the Bank of New York Mellon must
stop payment on the quotas Argentina has religiously honored to a much bigger
group of bondholders who agreed to provide the country with debt relief in 2005
and 2010. That group together holds more than $20 billion in restructured debt,
and some of them announced they too would appeal.
The ruling in favor of NML Capital Ltd., a fund run by billionaire
Paul Singer, was issued just before the long Thanksgiving holiday weekend, and
the consequences for Argentina were severe. The value of Argentina's
restructured bonds slipped in Monday trading, and the cost of insuring this
debt against default jumped 51 percent on Friday alone, according to data from
Factset.
This is where we are heading. If the
United States can’t get a handle on its debt we will become Argentina. We can expect the same kind of treatment from
our creditors. I can foresee this
country become a defendant in a Chinese court.
We can expect confiscation of our assets. A plaintiff had an Argentine naval training
ship seized in the port of Ghana as collateral.
And
since Argentina is strapped for cash, the government began to seize private
property. Anyone who had a pension fund in
2008 kissed that goodbye. Oil companies
were forced into buyouts which handed controlling interest over to the
government; reminiscent of Venezuelan’s Hugo Chavez and his expropriation
madness. Now foreign investment has come
to a halt. But that’s just the
beginning.
BUENOS
AIRES—Argentina plans to seize and auction off both the broadcast licenses and
the cable TV and fiber-optic Internet networks owned by any media company that
flouts a controversial media law.
The
country's top court looks likely to rule on the constitutionality of the law,
which opponents say not only violates constitutionally protected
private-property rights, but threatens free speech as well. The auction plans were confirmed Wednesday by Martin Sabbatella, who heads the federal agency created to enforce the law which critics say targets top media conglomerate Grupo Clarín SA and its most profitable business unit, Cablevisión.
Later
Wednesday, Congress passed a law that allows the government to bypass federal
appeals courts and take its case against directly to the Supreme Court.
The
companies have until Dec. 7 to present plans to sell off all broadcast licenses
and related assets that exceed a quota established by the media law. If they
don't, the government will begin the process of auctioning off the assets after
the deadline, Mr. Sabbatella said at a news conference.Another media group, Uno Medios, which also provides cable TV and Internet services around the country, will be similarly forced to sell its broadcast licenses, cable TV and Internet infrastructure or see them forcibly auctioned off.
I’m sure Argentina won’t cry for the United States when we have our financial collapse.
Source: http://billingsgazette.com/business/argentina-hopes-to-reverse-ny-debt-ruling/article_bc2c91bb-873b-5acd-8cfb-beefd890a17f.html#ixzz2DfWr5xuD
http://www.sbsun.com/ci_22048317/ny-judge-argentina-court-will-be-obeyed
http://www.reuters.com/article/2008/10/21/argentina-pensions-idUSN2128838220081021
http://online.wsj.com/article/SB10001424127887323551004578119653502110768.html
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