U.S. on the Road to Argentinian Crying Game

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://blogs.telegraph.co.uk/finance/ambroseevans-pritchard/5504137/Argentina_seizes_pension_funds_to_pay_debts_Whos_next/

http://www.reuters.com/article/2008/10/21/argentina-pensions-idUSN2128838220081021

http://www.nytimes.com/2012/04/17/business/global/argentine-president-to-nationalize-oil-company.html?pagewanted=all

http://online.wsj.com/article/SB10001424127887323551004578119653502110768.html

U. S. Senators Unsheathing Their Knives on S&P

Standard and Poor’s downgrade of the United States credit rating may have just opened a can of worms that they didn’t intend to happen. It is now rumored that the political powers that be in the U.S. Senate are unsheathing their knives and are coming full throttle for the throat of this rating agency.

Moody’s and Fitch are wisely sitting on the sidelines waiting for the inevitable bloodbath. None of these credit ratings agencies are innocent in the housing bubble that burst not only America’s economy, but that of the world.

All three are guilty of killing legislation that would have set a precedent. In 2002, the state of Georgia passed the toughest predatory lending law in the country. Standard and Poor’s helped lead the crusade to squash it. The book Reckless Endangerment describes the actions of S&P:

Standard & Poor’s was the most aggressive of the three agencies, however. And on January 16, 2003, four days after the Georgia Assembly convened, it dropped a bombshell. Because of the state’s new Fair Lending Act, S&P said that it would no longer allow mortgage loans originated in Georgia to be placed in mortgage securities that it rated. Moody’s and Fitch soon followed with similar warnings.

It was a critical blow. S&P’s move meant Georgia lenders would have no access to the securitization money machine; they would either have to keep the loans they made on their own books, or sell them one by one to other institutions. In turn, they made it clear to the public that there would be fewer mortgages funded, dashing the “the dream” of homeownership.

Folks, you’d better get your popcorn and drinks ready; because we are about to witness the cannibalization of all the bastards who’re responsible for the implosion of our economy.

Source: http://www.reuters.com/article/2011/08/08/us-usa-debt-congress-idUSTRE7775UO20110808

Reckless Endangerment How Outsized Ambition, Greed, and Corruption led to Economic Armageddon

New Debt Deal is a Big Sham

Rep. Louie Gohmert (R-TX) reveals his apprehensions about the debt bill in an interview on Fox News. It looks like the same old deceptive shenanigans are taking place, again.

The congressman is an advocate for a balanced budget amendment. But these D.C. creatures have already shown they have no regard for our Constitution. It looks like we are on the road to Greece.

Tea Partiers Are Not Responsible for Debt Crisis

How in the hell is it that the Tea Partiers are being blamed for the debt crisis? It is the out of control spending that brought about this movement. And now these fiscally responsible Americans are called extremist for refusing to give more credit to these spoiled D.C. brats.

If the country defaults on its debt, it is because the Obama administration allowed it to happen. There are whole bureaucratic agencies that should be cut, before one bond holder is denied his due. But we have seen what the Obama administration thinks of investors. Just look at what happened to those unfortunates who bought G.M.C. Bonds; the Anointed One bitch slapped them to make a political point.