Frigate Libertad:
La Nacion: “The U.S. ruling also favors local bondholders”
Perfil: “Industry warns that the decisions against the country are restricting credit”
La Nacion: “The creditors, with renewed hope”
Clarin: “Vulture funds: the government will bet on delaying the application of the sentence”
La Nacion: “Change of opinion in the U.S. courts”
Pagina/12: “The gangs of the financial system”
Perfil: “‘Vultures’”
Ghana Web: “Seized Argentine Ship a victim of decades of failed economic management”
All Voices: “Billionaire turns pirate; commandeers navy ship”
Dialogo: “‘Libertad’ Frigate Crew Arrives in Argentina; Ship Impounded in Ghana”
Foreign Policy: “Argentina’s war with the vulture funds”
DealBreaker: “Elliott Associates Winning Battles Against Argentina on Land and Sea”
Reuters: “Argentina’s stunning pari passu loss”
The New York Times: “U.S. Court Rules Against Argentina over Payments”
Bloomberg: “Argentina Loses U.S. Appeal of Ruling on Defaulted Bonds”
Town Hall: “US appeals court rejects Argentine bond arguments”
MercoPress: “US Court rules against Argentina: all bondholders must be treated equally, including hold outs”
Buenos Aires Herald: “Argentina’s almost impounded assets around the world”
ABC News: “Billionaire Holds Navy Ship Hostage”
Anchorage Daily News: “US appeals court rejects Argentine bond arguments”
Christian Science Monitor: “Ahoy Argentina: “Crew of boat seized by creditors in Ghana arrives home”
Bloomberg: “Argentina Bonds Sinking as Country Loses Court Appeal”
Reuters: “Argentina vows US ruling on debt ‘not end of litigation”
· Alejandro Rebossio writes a lengthy piece in La Nacion, entitled “The watershed year: an economy with more controls”, where he consults a wide range of economists. One year since Cristina’s re-election, “a series of measures that changed the scene in a way that was perhaps unimaginably before the elections” have “not only increased currency controls but also adopted profound changes, like the expropriation of 51% of YPF, the regulatory decree over the oil sector, the changing of the Central Bank charter and now the capital markets reform and the new law of labor accidents. The analysts consulted don’t believe that these measures reflect a change in economic policy, but a continuity. Some believe that they are a reaction from the government to the worsening of the international situation and also the local scenario for its own mistakes and omissions. It’s clear that after a year, for better or worse, the State finds itself more present in the economy. More than one economist warns that the model of fiscal surplus, abundance of dollars, competitive exchange rates and economic growth at Chinese rates, around 9%, is over.”
· Nelson Scibona, the Economy editor, writes in La Nacion that “No problems are on course for a solution” in the country’s economic policy. He reviews the government’s preoccupation with “bad points of departure” leading to “bad results” like the perception that the local financial markets are small because of regulatory flaws and not a gross lack of confidence due to erratic policies and unpredictable changes in rules. Thus, the government is heading in all the wrong directions. “The overwhelming succession of currency controls, restrictions on freedoms for companies or business sectors, changes in institutional rules, denial of objective problems and the proliferation of conspiracy theories characterize the first year of the second presidential term of CFK.” (he doesn’t mention foreign debt)
Global Relations:
- La Nacion reports that Vice Foreign Minister Eduardo Zuain will lead the Argentine delegation to Geneva tomorrow to open the dialogue with Iran’s government over finding a “legal framework” in common to work toward a resolution of the AMIA bombing case. The Argentine government is intent on making it clear that the delegation’s prime objective in this first meeting is to “gauge the true interest” of the Iranian side in the dialogue. An unnamed source close to Zuain told LA NACION: “The delegation is traveling to Geneva with a defensive attitude to evaluate the situation and the real interest of Iran. They have to be very careful not to be caught in a trap.”
Cristina Kirchner:
- Susana Viau writes an op-ed in Clarin, “When exceptionalism begins to get tired”, where she uses the example of Cristina’s “they can keep the frigate” comment as an example of how she spoke not as the commander-in-chief of the Armed Forces but as the leader of Kirchnerism, speaking from the political handbook, that she would not negotiate. “The president has appropriated the power to say where sovereignty is deposited at any given moment.” She uses this as an intro to a piece about the government’s insidious attempts to gain control of the Argentine judiciary.
JORGE ARGUELLO on Twitter and Blog:
- Several tweets about Jimmy Carter, links to promote the BCRA article in the latest newsletter, by Marco del Pont, and a tribute to Nestor Kirchner on the 2nd anniversary of his death.
TRENDING TOPICS/ARGENTINA on Twitter:
- No political topics in this morning’s top 10
La Nacion
The U.S. ruling also favors local bondholders
Sunday, October 28, 2012
By Martin Kenanguiser
Norma Lavorato is more than 80 years old, has a retirement fund from more than 43 years working at the Portuguese embassy and only one thing in common with the “vulture funds”: the decision that came two days ago in a courtroom in New York where Argentina was ordered to pay them for sovereign debt warrants in their possession that also benefitted her and another 12 Argentines.
In a phone interview with LA NACION, Lavorato was satisfied, while moderately tempered. “If they honor it we will be in agreement with the decision,” she said. “I don’t have much expectation of collecting because I’m very old, but it’s a very important decision.”
She is one of the 13 small investors mentioned in the ruling from the Court of Appeals in New York and that, together with the funds NML Capital, Aurelius, ACP Partner, Blue Angel and Olifant Fund, managed to put the government against the wall for US$1.333 billion in bonds with foreign legislation issued by Argentina.
They are Pablo Varela, Lila Burgueno, Mirta Dieguez, María Carballo, Leandro Pomilio, Susana Aquerreta, María Corral, Teresa Muñoz de Corral, César Vázquez, Horma Gines, Marta Vázquez and the aforementioned Norma Lavorato, together with her sister Carmen, according to the written 29 page decision two days ago. With significant fear of suffering some retaliation from the government, the bondholders didn’t want to give too many details about their history and are feeling anger because there is only talk of the “vulture funds” as the winners of this financial battle against the country.
"We bought bonds before 2000. I worked for 43 years in the embassy of Portugal and I’m a regretful investor. I would even like pesos, not dollars,” said Norma Lavorato. Together with her sister Carmen she is waiting for news from her lawyers to see what will happen with this case, as Judge Thomas Griesa will have to determine in the coming weeks how to order Argentina to pay in order not to “discriminate” against the creditors that remain in default, versus those who accepted the swaps of 2005 and 2010.
Angélica Bergonzi, one of the promoters of the Association of the Victims of the Default and Pesification (ADAPD) also celebrated the ruling, while clarifying that the association did not participate in the case unfolding in the United States.
"These are people that didn’t have lawsuits filed and the big funds that participated did so with bonds they bought at their total value. It was a unanimous decision. For Argentina, I regret that these things happen, but getting into the heads not only of officials but also in representatives of the opposition to not want to comply has brought us to these situations,” Bergonzi told LA NACION.
"As bondholders,” she emphasized, “we see it as a good thing, but as Argentines we would like the issue resolved once and for all honoring the debts. This will not be paid with money, but with bonds, but we don’t accept the same as those who entered the swaps, because they accepted it voluntarily and we are waiting for 11 years. Overall, the equal treatment that the court of appeals sets forth does not mean receiving the same, but, as far as payment to an account from a negotiation that should be done in the courtroom.”
Bergonzi and Horacio Vázquez, also of ADAPD, admitted that they were not expecting a ruling of this kind, almost 11 years after the default. “We’re trying to contain people, because they are elderly people,” Bergonzi said.
Before 2001
Different from the big investment funds, the majority of the individual bondholders bought their bonds before the default of 2001; some of them got firm rulings in Argentina or the US, but they continue to wait to be able to collect, many of them, before death.
"There is a group of Argentines that bough sovereign bonds as a means of savings to safeguard their future before the default; they’re not financial institutions, but our governments decided not to return their money, after paying off debts to the most powerful,” Vázquez said.
The saver said that “it’s a pity that it had to come to this, like the attachment of the Frigate or this decision, for our country to be compelled to respect its contracted obligations.”
Before the end of the year, they predict that Judge Griesa will have to decide the formula for payment to the beneficiaries: if he gives them the same as those who entered the swap or 100% of what they demand, a judgment that the court of appeals explicitly left to the discretion of the judge of the Southern District of Manhattan.
In turn, the government believes, according to official sources consulted by LA NACION, that Griesa could reverse part of the higher court ruling and not have to be put in the uncomfortable option of paying the bondholders that didn’t accept the offers, with haircut, of debt that the country offered twice in the last seven years, to not fall into default.
"This is far from being over: it remains to be seen what Griesa does and then what happens with the eventual appeal to the Supreme Court,” said an official that is participating in the sensitive issue, shocked by the succession of bad news since the attachment of the Frigate Libertad at the beginning of the month in Ghana.
In their decision, judges Rosemary Pooler, B.D. Parker and Reena Raggi found that Argentina is discriminating against these bondholders versus those who accepted the swaps, siding with a broad interpretation of the pari passu clause that orders payment in a proportional form.
"The court finds that Argentina violated this decision when it made payments under the current regime of bond exchanges, while refusing to satisfy payment obligations to the plaintiffs and when it approved the lock law and its suspension,” said the judges.
Attorneys that represent the other investment funds said that they were expecting a more narrow decision, focused on a critique of the lock law, for which Argentina closed off the path for paying creditors that didn’t accept the swaps.
However, those close to the most aggressive funds say that this law approved by Congress, in reality, doesn’t impede Argentina’s compliance with paying payment on unfavorable sentences for the country, so there would be a loophole to execute them.
Worry in the UIA
The president of the Argentine Industrial Union, José Ignacio de Mendiguren, acknowledged yesterday that there is “worry” in the business sector over the eventual impact on the economy that the attachments put forth by the “vulture funds” against Argentina could have. “It worries us, that’s clear,” he said in statements on radio, in which he also warned of the “lack of investment.”
Perfil
Industry warns that the decisions against the country are restricting credit
Sunday, October 28, 2012
By Patricia Valli
Without a return to the international markets in sight by the government, business leaders believe the “noise” being generated by the decisions in favor of the vulture funds is restricting foreign credit, as well as making it more expensive, for companies.
“Today, there are almost no companies that take credits abroad. If the public sector had the capacity to take debt abroad it would give us more room to finance companies in the internal market,” said the president of the Argentine Industrial Union, José Ignacio de Mendiguren, from Spain where he traveled to participate in the meeting of the Ibero-American Business Entities.
The financing rate for the State abroad comes to around 12% for a short-term bond in dollars, using the Global 2017 as a reference. Commercial credits, under national promotion agencies, are waiting for a resolution of the negotiation with the Paris Club.
The representative of the manufacturing sector admitted that there is concern over the progress of the vulture funds and said that it’s necessary “to widen financing for investments.” Finance Secretary Adrian Cosentino minimized the impact of the measure on Friday.
About th meeting in Spain, he warned that more investments would be sought but that European companies continue to express doubts over the restrictions on moving dividends out.
Pot-banging. The organizing of the 8N protest also transcends borders and is winning the support of the creditors in the American Task Force Argentina. The “task force” has on its website a place to download an image that simulates the “red card” that Christine Lagarde, the head of the International Monetary Fund, threatened to take out on Argentina if it doesn’t present its data on statistics by December 17.
The cards, which have “¡Basta K!” written on the front, have “#8N” on the back. And this week they renewed the call to download and print them to bring to the “pot-banging” (caceroleada) abroad that was seen during the last visit by Cristina Kirchner to the United States.
The vulture funds, who have bonds in their power of US$4 billion according to extra-official estimates, in addition to financing those groups are completing the strategy of pressuring the international courts for defaulted bonds with claims before the ICSID but also bring their lobby effort to the Congress of the United States, governments and international organizations.
La Nacion
The creditors, with renewed hope
Sunday, October 28 2012
By Silvia Pisani
DENVER, Colorado.- The hard setback that the official strategy against Argentina’s creditors suffered these weeks renewed expectations from those that are still pressuring the country for it, together and as the fruit of various lawsuits, to pay debts of more than US$1 billion.
In the same way, it seems to encourage those who are part of the smaller group of creditors that rejected the direct negotiation with the government and opted for the uncertain and long journey of the judicial route. Among them, the speculative funds that the government calls “vultures”. But they are not the only ones.
"I don’t sympathize, nor do I have anything to do with them, but it pleases me to see that someone is starting to say to Argentina that it can no longer continue mocking those who financed them,” said Joseph Kaplan, a small investor that, through a Florida firm, joined one of the class action suits of cheated investors.
That was until he tired of waiting for courts to rule in his favor and, defeated, opted for entering the second swap that the government offered, two years ago.
"With all the waiting, all the mistreatment I suffered for years, now I regret having taken that step and not waited a little more. I think that things are starting to change for those of us that were cheated. The Argentine government talks about vultures, but only because we are not doing what they want us to. We aren’t all vultures,” he insisted.
After the debt swaps of 2005 and 2010, there were a little more than 7% of the unpaid debt left in litigation in the courts, demanded mostly by those with more resources to finance the costly judicial process: the so-called “vulture funds”.
"The judicial complaints of this type are uncertain. There isn’t a lot of judicial experience, each case has particular aspects, but it’s clear that it’s a long path, difficult in that the plaintiffs have infinitely less resources than the defendants,” said Charles Flynn, an attorney that advised American investors in Argentina, to LA NACION.
With the attachment of the Frigate Libertad, first, and the judicial ratification for Argentina to pay its creditors, which was just done by a New York appeals court, the path of litigation isn’t doing badly.
It was difficult to find anyone in Washington that imagined, now, the possibility of a negotiated path like that one, two years ago, that opened the second debt swap. “The options have narrowed and now only the judicial route seems open. I don’t imagine anything else,” Flynn said. The judicial ratification was a bucket of cold water for the government of Argentina, which trusted that the initial ruling from Judge Thomas Griesa in which he ordered payment would be overturned.
At the time, Minister Hernan Lorenzino celebrated the agreement in judgment that, shortly later, the government exhibited from the government of Barack Obama, in advising against the idea of the Court of Appeals following Griesa.
Argentina “must normalize” relations with its creditors, but following the course indicated by Griesa would create “tension” in “our international relations,” said the Justice Department in a so-called “amicus curiae” brief.
But, also then a source familiarized with the case said that one of the “surprises” that he found in one of the hearings before the decision was the judgment revealed by one of the judges in the appeal, who seemed convinced of standing with Griesa.
"It clearly gave the impression that the opinion of the American Justice Department wasn’t being accepted,” he explained.
Argentina now falls on the uncertain path of appealing to the U.S. Supreme Court.
Clarin
Vulture funds: the government will bet on delaying the application of the sentence
Sunday, October 28, 2012
The Argentine government will point toward delaying compliance on the decision taken by the Court of Appeals of New York. The American judiciary ratified a decision that establishes that Argentina discriminated against the vulture funds and other bondholders that didn’t accept the swap proposals that were made in 2005 and 2010. That sentence also obliges the country to “proportionally” pay the holdouts.
The Court of Appeals of New York ratified on Friday a decision by Judge Thomas Griesa and, now, it’s the U.S. judge that has the cards in his hand. The court said in its 29-page ruling that Griesa included two possible alternatives for payment to the holders of public bonds that are in default, but clarified that they are not “capable of discerning with precision from the records how this formula is intended to function,” and, for that, they asked him to clarify “how this mandate will work.” So, now it’s the judge’s turn to clarify how the Argentine state will have to pay the bondholders. Then, the case will have to return to the Court of Appeals of New York.
The ACM consulting firm estimated that the government will not appeal the decision in that court now because “the underlying question” (the form of payment) is still not resolved. What the official economic team can do, once Griesa rules, is to appeal the implementation of the payment mechanisms. This situation would allow Kirchnerism to buy time and avoid complications in the next two big debt payments in foreign currency: the December 2 payment on the Global 17 bond, and on December 15 for the GDP coupon.
Despite that the government could delay application of the ruling, the judicial setback for Argentina is already generating costs for the country. Ex-Finance Secretary Daniel Marx estimated yesterday in an interview with Clarin that the bond prices under American legislation could possibly fall, while at ACM they predict that the drop will also come for bonds under local legislation.
Ex-Finance Secretary Guillermo Nielsen said, also in an interview with this newspaper, that the decision could have more severe consequences because it would set a strong precedent on different negotiations that would take place between states and creditors.
La Nacion
Change of Opinion in the U.S. courts
Sunday, October 28, 2012
By Eugenio Bruno
The attachment of the Frigate Libertad and the confirmation, by a U.S. court of appeals, of a decision from lower court judge Thomas Griesa – which orders the country to pay interest in an “equitable” manner as bonds issued in the debt swaps of 2005 and 2010 for those bonds whose holders decided not to enter into them – marks a change.
Both cases are not part of what up to this moment was understood as the predominant position in this material. Overall, these rulings still have higher courts that could reverse the current results.
In the case of the Frigate Libertad, the rulings issued would seem to contradict certain applicable articles of laws in the United States. In particular, article 1609 of the so-called law of sovereign immunity, which establishes that property of a foreign state in the United States will be immune to attachments, seizures and executions with the exception of clauses 1610 and 1611 of that chapter.
Article 1610 says that property of a foreign state used for commercial activity in the US will not be immune if those assets are or were used commercially in relation to commercial activity that was the origin of the complaint. While 1611 states that property of a foreign state will be immune to attachments if the property is, or is intended to be, used in relation to military activity and has a military character, or is under control of a military or defense agency. For that is why traditionally attachments have not succeeded against countries on non-commercial assets and even less so on those related to military activities.
So the confirmation of the lower court decision from Judge Griesa, which would set up the obligation of payment of interest on those bonds in regular situation with those in a state of non-compliance, that sentence would also constitute a very marked change in posture on matters that have an exactly contrary uniformity, which is, the clause of pari passu never having been extended, in higher courts or by Griesa himself in the past, in such a way (broad interpretation) but that it only means that debtor countries cannot issue new debt that has a range of legal precedence superior to the debt previously issued (restricted interpretation). That is to say, a country cannot issue new senior debt and leave the debt issued as legally subordinated debt.
The pari passu clause was understood traditionally in the sense that debt could not be emitted with greater legal precedence (restricted interpretation) but not in the sense that it all the debt could be paid under equal conditions (broad interpretation). The precedents in the matter (Elliott v Peru, and Leucadia v. Nicaragua) showed certain precautionary measures that were favorable to the broad interpretation, but were left without effect by higher courts.
The new decision of the court of appeals is appealable to the U.S. Supreme Court, which will certainly have the last word. Meanwhile, the consequences of this ruling could be significant for future cases of sovereign debt restructuring that other governments could bring forward by financial necessity, like Greece, Portugal and, eventually, Spain, so that if an investors that enters into swaps (with loss in value by virtue of the usual haircuts) they’d collect the same as one who didn’t (without haircuts).
This could rebound also on debt restructuring emitted by companies, since it would not make sense for an investor to accept a swap on his holdings.
Pagina/12
The gangs of the financial system
[Please note the highlighted and bolded section of the Pagina/12 story below – a very odd thing coming from Martin Granovsky and this pro-K newspaper… I wouldn’t go so far as to call it a trial balloon, but the fact that he is parsing things this way is very notable…]
Sunday, October 28, 2012
By Martín Granovsky
Argentina is under attack by the vulture funds. It was confirmed in the higher court ruling from New York on Friday, validating a ruling from Judge Thomas Griesa that obliges the government to pay US$1.4 billion to NML, of Elliott Management. Who are they? To say “the system” is always strong, but it’s not precise. It could be the capitalist system, the financial system, the world power system, the declining system of the hegemony of the United States…. It’s all and nothing at the same time. Vagueness that has come down to the ground.
In “Carancho” (eng: “Buzzard”), the Pablo Trapero film starring Ricardo Darin, a law firm protected by a police commissioner and associated with him looks for traffic accident victims, seduces them, tricks them, takes advantage of their lack of economic resources and their needs, file lawsuits with true or false arguments, present proof or plant it. Are they marginal? In reality they move at the margins, but on the inside. Their victims are the weakest, which then become double victims, of accidents and the Mafioso group, and at the same time they are not outside the central structures of society: the hospitals, the police, inequality and the classism exercised from top to bottom.
Soccer gangs are another example. Javier Cantero, president of Independiente soccer club, always talks of “a general and twenty colonels” to distinguish the leadership of the rowdy gangs – which are a small form of organized crime – with respect to the boys tricked by so-called hardship or subjected to servitude. Like the attorneys that stalk at the margins, the heads of the gangs sometimes are related to small activity, like resale of game tickets, or big deals, like junk yards, drug trafficking and money laundering in the buying and selling of players between Argentina and Europe. As with every kind of structured crime, it wouldn’t exist outside the state, of the sporting institutions and official from security agencies.
The companies headquartered in the Cayman Islands that bought Argentine debt bonds from banks, perhaps at very low prices, to file suit and collect someday, are like the hooligans of the financial system. Hooligans with influence: they can influence members of the lower House of the United States. Hooligans with arguments: in a system supposedly based on the obligation to pay debts, they say that Argentina will have to be obliged by the bondholders that did not accept the debt swap to be paid now the same as the others. And hooligans with indirect help: while Argentina has already lost lawsuits in New York, if the Argentine defense minister hadn’t sent the Frigate Libertad to Ghana the attorneys for the vulture funds would have been less visible.
In an article published on the website of the influential American magazine Foreign Policy, columnist James Glassman says that Argentina is a bad example of international behavior. He details inconvenient items, from inflation to the statistics, but he settles on the original sin: “The real problem, however, is the contagion. Argentina ignored its obligations on the debt issue.” For Glassman there is only one way to avoid the contagion: “Expel Argentina from the International Monetary Fund and the G-20 and cut off credits from international organizations.”
Up to the close of this edition, the Argentine government still hasn’t rounded out its strategy before the latest success of the vulture funds beyond that it will go to the US Supreme Court. But both the requisition of the Frigate Libertad and the higher court ruling in New York put the issue at a higher level within the diplomatic scene. Until now Argentina only admitted a pending account for exiting the default of 2001: the debt with the Paris Club. Both President Cristina Fernández de Kirchner and Foreign Minister Hector Timerman said last week that in no way would they negotiation with the vulture funds. So, no negotiation. But yes to payment? Open question for one of the fronts of tension that Argentina has with the world. The other is the dispute over the Malvinas, which also could generate punishment, visible or not. After all, the United Kingdom will be a declining colonial power, but it hasn’t last all of its powers nor its capabilities. And this open dialogue with Iran for supporting Argentina’s justice complaint, which will be less conflictive if Barack Obama is elected president on November 6 and confirms that he will start head to head negotiations with Teheran over the Iranian nuclear program.
In this box the weight of Brazil and the relationship with China are all the more decisive for Argentina. For that the obligation to attend to what happens in each one of those countries with the same curiosity and, if it were possible, with more than when pro-K and opposition leaders put in focus the metaphysical reaches of, for example, a photo between Hugo Moyano and Mauricio Macri.
For China, there will be a chance to follow them a few more days. On November 8, the 18th Communist Party conference begins, which will decide the policies for the coming decade and will elect the general secretary of the CPC, which in March 2013 will also become the president of the People’s Republic. Hu Jintao will leave his post to Vice President Xi Jinping, and Deputy Prime Minister Li Kequiang will succeed Wen Jiabao, the current Prime Minister.
Brazil could give good news to Argentina today. Despite that neither the popularity, now at 65%, nor the stability of the government of Dilma Rousseff being in play, the betting of the Workers Party (PT) is to win the second round of the Sao Paulo mayoral election. Fernando Haddad, ex-minister of Education for Lula and Dilma, remains in front in the latest polls over Jose Serra, the candidate of the Brazilian Social Democratic Party, which was the base for President Fernando Henrique Cardoso when he imposed his economic program founded on the permanence of misery for millions of Brazilians and the addition of external capital as a form of financial connection to the world.
Serra was already defeated twice for president, in 2002 and 2010. As opponents to Lula and the PT have concentrated so much of their hopes on him and Sao Paulo, it makes today’s fight even bigger. If they win, it will not be good news for the PT, but it wouldn’t be a lethal political drama. If Serra loses, it turn, the effect of the defeat of the Brazilian elites with a slave-o-cratic stamp will be greater.
Perfil
“Vultures”
Sunday, October 28, 2012
By Pepe Eliaschev
Co-proprietor of Grupo Veintitrés which operates many media companies put to the service of the government, Matías Garfunkel was very clear on this occasion. The multimillionaire heir to Jorge Garfunkel and Mónica Madanes wrote on October 11 in his magazine: “I would say that almost for the sake of global growth, it is time for a change of control at the heart of the U.S. Government. It was more than clear, in the first presidential debate, the appalling way in which Mitt Romney made clear how little President (Obama) understands of the economy.” Then, Garfunkel was more explicit: “One would almost say that for the good of the main economy of the world, for the countries which in some way depend on the western hemisphere and for the good of Israel, the next president should be Mitt Romney and not Barack Obama.”
Grupo Veintitrés, in that Garfunkel is the main contributor of capital, is inextricably tied to the government of Cristina Fernández, in whose service controls various newspapers and magazines, and manages radio stations and TV channels. It’s subsistence would be unimaginable in the free game of supply and demand of readers, listeners and television viewers if it were not for it being the main recipient of the munificent official platform of publicity. Grupo Veintitrés responds to the interests of the government.
This assumption apparently collided, however, the same week of the declaration of love by Garfunkel for the candidate of the U.S. right, Romney, with when the teaching vessel of the devalued Argentine Navy was anchored to an African port after being attached by the judiciary of Ghana. That attachment came from an injunction solicited by an American investment fund, whose head is the biggest individual contributor to the Romney presidential campaign for the November 6 election.
The blind trust of the multimillionaire Romney and his wife, Ann, was especially fed by the financial speculator célebre Paul Singer, author of various “achievements”. With his hedge fund friends, he bought the auto parts division of giant General Motors at only 67 cents on the dollar to bring it then to 22 dollars. How did he do it? He threatened General Motors and the U.S. Treasury with the total shutdown of the automobile industry which President Barack Obama had to rescue from bankruptcy.
The Romneys’ money has already been funneled to Elliott Management Corporation, the legal umbrella for Singer headquartered in New York, in the name of Ann Romney, whose marriage to Mitt consolidates unbreakable economic interests. That placement of the Romneys’ money in Singer’s empire was the goose that laid the golden egg: they made no less than 15 million dollars, while the hidden real figure could be eight times that amount, according to respected American media outlets, like the liberal magazine, The Nation.
Singer has also been the biggest financier of Romney’s vice presidential candidate, Congressman Paul Ryan. According to The Wall Street Journal, it was Singer that obliged Romney to name Ryan as his running mate. Singer has been the main economic advisor to Romney. He gave a million dollars to a Republican Party political action committee set up with contributions from 37 billionaires. The speculative fund managed by Singer, NML Capital Limited, drove the attachment of the frigate. NML Capital Ltd. is a subsidiary of the aforementioned Elliott Capital Management of Singer’s. Meanwhile, in Buenos Aires, last week brought the news that Vice President Amado Boudou was seen dining in the exquisite restaurant of the Palacio Duhau Hyatt, on Avenida Alvear, with Garfunkel’s partner, Sergio B. Szpolski. Boudou didn’t have a good time that night, and was insulted by regulars at the restaurant, but that wasn’t important.
So, in an elemental syllogism, these steps add up like this: the government is financing in an exorbitant way the communication media of a supposedly “private” group. One of the two heads of this group is seen dining in public alone with the Vice President of the Nation, a beautiful exhibition of cordiality, the same that allows the Economy Minister to only concede “reports” to a radio station exploited by the same media group. The other head of the pool, for his side, expresses his solidarity of class and, among millionaires, professes his love for the ultra-rightist Romney. Garfunkel’s problem is that he did it the same week that the frigate of the Argentine Navy was detained in a remote port by judicial order interposed by a financial fund which holds the money and direct interests of Romney. In Spanish: Garfunkel is financing himself with business with the Argentine government, but however at the same time fascinates himself with those who attach the integrity or at least the shame of this country.
So then are we talking about malpractice or naivety? It’s clear that the amorous Garfunkel is not considered a bright light by those who have been leveraged with him in other business, but it’s clear that his crowned forehead is at the front of the group of media tools that work for its contractor, the Casa Rosada. It’s that this man has responsibilities. At the end of the day, the episode, between grotesque and pathetic, shows that the government values varied and picturesque executors.
They are usually superficial and unpredictable, irresponsible and audacious, something in line with some of the brimstone of the K-intelligentsia. It ends up being revealing that to love Mitt Romney from the breast of officialdom is equivalent to associating with the bondholders that attached the mythical frigate, a hedonistic luxury, an incestuous lust among multimillionaires.
Ghana Web
Sunday, October 28, 2012
On Thursday, October 4, 2012, the ARA Libertad, an Argentine Military Training ship which berthed at Tema Port, was seized on the orders of a Ghanaian High Court much to the chagrin of the entire Argentine government.
The High Court in Ghana granted NML Capital Limited, ‘a commercial creditor of the Republic of Argentina, an injunction and interim preservation order against the ARA Libertad, The order required the Libertad to remain at Tema Port, pending hearing on the enforcement in Ghana of judgments against Argentina issued by the United States District Court for the Southern District of New York, supported by similar judgments in London. Argentina may obtain release of the ship however, by posting a bond with the High Court in Accra’ a significant departure from the nearly $300m debt owed since 2001. That came to pass and the courts in Ghana posted a bond of $20 million dollars or in default give up the Ship, which, by the way, the Argentines have said they are prepared to do, to save (what is left of) their ‘national dignity’. The Argentine President, Cristina Fernandez in a speech broadcast to the world, reiterated her earlier call that “As long as I am President, they can keep the frigate but not the liberty, sovereignty and dignity of this country”. “No vulture fund, no one gets to keep that”, she added. The Argentines may also hope against hope by using its temporary membership of the UN Security Council to compel Ghana to release the ship.
All Voices
Saturday, October 28, 2012
Billionaire hedge fund investor Paul Singer has taken a very novel approach toward settling a very large debt he is owed.
Singer has decided to call in a $1.6 billion marker he claims is owed to him by the South American country of Argentina.
The country reportedly offered to settle the debt at 30 cents on the dollar. Singer, of course, scoffed at the offer and promptly refused. Instead, the business-savvy Singer decided to snag a page from the Somali pirates' playbook.
Dialogo
Friday, October 26, 2012
A total of 280 sailors from the Argentine Navy training vessel Libertad, that was impounded in Ghana due to a lawsuit filed by a hedge fund, arrived in Buenos Aires’s Ezeiza International Airport on board a charter flight on October 25, reported AFP.
The Argentine Navy frigate crew, retained at a port near Accra since October 2, arrived on an Air France special flight at the airport, where the Sailors were received by their families with a warm round of applause.
Most of the Argentine crew arrived on the flight, together with their counterparts from Chile, Paraguay, Brazil, Ecuador, and Venezuela, the guests who participated in the training tour, a Navy spokesman told AFP.
Foreign Policy
Friday, October 28, 2012
By Joshua Keating
Most of the crew of the Argentina navy ship Libertad has returned home, leaving behind their a skeleton crew to man the three-masted sailing ship in Ghana. The Libertad was prevented from leaving Ghana have a local court ruled in favor of the U.S. "vulture fund" NML Capital, which says it is owed $370 million by the Argentine government from its default a decade ago.
Argentina is angrily contesting the seizure at the United Nations. Speaking today, Foreign Minister Hector Timerman vowed to reclaim the ship, and also made clear that this is not an isolated incident:
“Until the case of the frigate ARA Libertad, the vulture funds managed to impound 28 assets from the Argentine state”, said Timerman, but in all those cases Argentina managed to recover the disputed assets.
DealBreaker
Friday, October 28, 2012
By Matt Levine
If you’re a certain kind of dork you will enjoy the hell out of the Argentinian pari passu clause decision out of the Second Circuit today; the opinion is here and here are good things to read from Anna Gelpern and Joseph Cotterrill. In 1994 Argentina issued bonds under New York law that said “The payment obligations of the Republic under the Securities shall at all times rank at least equally with all its other present and future unsecured and unsubordinated External Indebtedness.” Then it exchanged those bonds into new unsecured and unsubordinated external bonds, at 25-29 cents on the dollar, in 2005 and 2010, promising holders that if they did not take the new haircut bonds then they’d never see a penny on the old bonds. Then Argentina went merrily on its way, making regular payments on the new bonds and not the old ones. A bunch of hedge funds, including mainly piratical Elliott Associates, bought the old bonds and sued to get them paid back.
Reuters
Saturday, October 27, 2012
By Felix Salmon
I have to give it to Reynolds Holding on this one: he called it, I was wrong, and today I paid him $5 in settlement of our bet. To the astonishment of almost everybody I know (except Ren), the Second Circuit sided with Elliott Associates and ruled unanimously against Argentina today. It’s a hugely important decision, which will certainly have unintended consequences for many years to come.
You can see the market reaction most clearly in Argentina’s credit default swaps, which gapped out to a whopping 1,325bp. That’s up 350bp on the day, and it’s a clear sign that the markets are extremely worried the unexpected ruling will cause the very thing it’s ostensibly trying to cure: an Argentine default.
The New York Times
Friday, October 26, 2012
A federal appeals court in New York said on Friday that Argentina improperly discriminated against bondholders who refused to take part in two large debt restructurings, setting back the country’s efforts to recover from a roughly $100 billion default a decade ago.
Bloomberg
Friday, October 26, 2012
By Bob Van Voris
Argentina can’t make payments on restructured sovereign debt while refusing to pay holders of its defaulted bonds, a U.S. appeals court ruled in a victory for creditors including Elliott Management Corp.’s NML Capital Fund.
Argentine bonds sank the most in four months on the ruling. The U.S. Court of Appeals in New York today upheld lower-court decisions, which may help creditors who rejected the country’s restructuring offers collect $1.4 billion in defaulted debt.
Town Hall
Friday, October 26, 2012
BUENOS AIRES, Argentina (AP) — Argentina lost its long battle against bond holdouts in the U.S. courts Friday when an appellate panel rejected every argument it made against paying $1.33 billion to investors who refused to accept as little as 25 cents on the dollar for the country's defaulted debt in 2005.
The U.S. 2nd Circuit Court of Appeals in New York rejected a dozen appeals filed by Argentina over the years, and ordered the South American country to pay the holdouts an equal amount whenever it makes payments on other debt that has been restructured since the country's economic collapse a decade ago.
MercoPress
Friday, October 26, 2012
Friday’s decision by the 2nd US Circuit Court of Appeals in New York stems from Argentina's 100 billion dollars default in 2002, and could affect how easily countries trying to extricate themselves from sovereign debt crises might in the future fend off angry creditors.
A unanimous three-judge appeals court panel said that in conducting the restructurings, Argentina violated a provision in the bonds that required it to treat bondholders equally, even if they chose to hold out.
Buenos Aires Herald
Friday, October 26, 2012
Following Foreign Minister Héctor Timerman’s announcement last night that there had been attempts to impound 28 assets, the list of actual assets is remarkable.
In the US, state properties including the Ambassadors’ residence and armed forces attaché offices, after NML presented a similar claim in 2004, with no assets currently seized. The President’s private jet, Tango 01, was impounded, but for two months in 2007.
NML capital also made an attempt to seize Argentine national bank assets in September 2008 and May 2010, as well as a satellite in 2011. Among the most recent attempted asset attachments are reserves deposited in the Federal Reserve Bank of New York, and patents over the licences for the use and genetic mutation of a rice gene, both in 2011. The latter was presented by the investment funds Aurelius and Blue Angel Capital.
In Switzerland, the Argentine Central Bank’s account at the International Settlements Bank was embargoed on December 2009, although a local court lifted the ruling on April 2009.
ABC News
Friday, October 26, 2012
So you’re a super-rich American investor and a large South American country owes you $1.6 billion, which it refuses to pay in full.
You can take a partial settlement that others have taken – which reportedly would get you just 30 cents on the dollar – or you could do something a little more drastic and, say, seize a high-profile naval vessel belonging to the offending country. What do you do?
Such was the real-world problem facing billionaire Paul Singer before he decided on option B, and his company convinced a small African nation to seize Argentina’s Libertad frigate.
Anchorage Daily News
Friday, October 26, 2012
By Michael Warren
BUENOS AIRES, Argentina — Argentina lost its long battle against bond holdouts in the U.S. courts Friday when an appellate panel rejected every argument it made against paying $1.33 billion to investors who refused to accept as little as 25 cents on the dollar for the country's defaulted debt in 2005.
The U.S. 2nd Circuit Court of Appeals in New York rejected a dozen appeals filed by Argentina over the years, and ordered the South American country to pay the holdouts an equal amount whenever it makes payments on other debt that has been restructured since the country's economic collapse a decade ago.
Christian Science Monitor
Friday, October 26, 2012
By Jonathan Gilbert
One would have expected crew members of the Libertad, an Argentine ship impounded in Ghana for the past three weeks, to be delighted to return home following its government-ordered evacuation.
“The worst thing you can ask a sailor to do is abandon ship,” he fumed Thursday, criticizing President Cristina Fernández de Kirchner.
RushLane
Sunday, October 28, 2012
With plans afoot for a new Chevrolet product in the making, General Motors has announced that between 2013 and 2015, $450 million will be invested in their company plant in Rosaria Automotive Complex in Argentina. This new Chevrolet is for global audience and though no further details are available regarding the upcoming model, General Motors is planning these investments which will go towards tooling up for the new Chevrolet product.
Bloomberg
Friday, October 26, 2012
By Katia Porzecanski and Drew Benson
Argentine bonds sank the most in four months after the country lost a bid to reverse U.S. court rulings that may help creditors including hedge fund Elliott Management Corp. collect $1.4 billion on defaulted debt.
The government’s dollar-denominated notes due 2015 dropped 4.99 cents, the biggest slide since June 11, to 84.55 cents on the dollar, at 5 p.m. New York time. Yields jumped 2.29 percentage points to 13.82 percent, the highest level since July 27, according to data compiled by Bloomberg.
Reuters
Friday, October 26, 2012
Oct 26 (Reuters) - Argentina on Friday vowed to fight a U.S. appeals court ruling that said it had discriminated against holdout creditors who own the country's defaulted bonds by giving priority to bondholders who accepted harsh debt swap conditions.
La Nacion
Domingo, 28 de octubre de 2012
Norma Lavorato tiene más de 80 años, una jubilación por los 43 años trabajados en la embajada de Portugal y una sola cosa en común con los "fondos buitre": el fallo en el que anteayer un tribunal de Nueva York ordenó a la Argentina que les pague por los títulos soberanos de deuda en su poder también la benefició a ella y a otros 12 argentinos.
En diálogo telefónico con LA NACION, Lavorato se mostró satisfecha, aunque con una ilusión moderada. "Si se cumple, estaremos conformes con el fallo", afirmó. "No tengo muchas expectativas de cobrar porque soy muy grande, pero es una decisión muy importante."
Ella es uno de los 13 ahorristas minoristas mencionados en la sentencia de la Cámara de Apelaciones de Nueva York y que, junto a los fondos NML Capital, Aurelius, ACP Partner, Blue Angel y Olifant Fund, lograron poner al Gobierno entre la espada y la pared por 1333 millones de dólares en bonos con legislación extranjera emitidos por la Argentina.
Se trata de Pablo Varela, Lila Burgueno, Mirta Dieguez, María Carballo, Leandro Pomilio, Susana Aquerreta, María Corral, Teresa Muñoz de Corral, César Vázquez, Horma Gines, Marta Vázquez y la citada Norma Lavorato, junto con su hermana Carmen, según el fallo escrito de 29 páginas emitido anteayer. Con bastante temor a sufrir alguna represalia por parte del Gobierno, los bonistas no quieren dar demasiados detalles sobre su historia y sienten bronca porque sólo se señala a los "fondos buitre" como los ganadores de esta batalla financiera contra el país.
"Compramos los bonos antes del 2000. Trabajé 43 años en la embajada de Portugal y soy una ahorrista arrepentida. Quiero aunque sea los pesos, no los dólares", dijo Norma Lavorato. Junto con su hermana Carmen, espera las novedades de sus abogados para ver qué pasará con esta causa, ya que el juez Thomas Griesa deberá determinar en las próximas semanas cómo le ordena pagar a la Argentina para no "discriminar" a los acreedores que siguen en default, frente a los que aceptaron los canjes de 2005 y 2010.
Angélica Bergonzi, una de las promotoras de la Asociación de Damnificados por el Default y la Pesificación (Adapd), también festejó el fallo, aunque aclaró que la asociación no participó del caso desarrollado en EE.UU.
"Ésta es gente que no tenía juicios iniciados y los fondos grandes que participaron lo hicieron con bonos que compraron a su valor total. Fue un fallo unánime. Para la Argentina lamento que pasen estas cosas, pero el empecinamiento, no sólo de los funcionarios, sino también en representantes de la oposición, de no querer cumplir, nos lleva a estas situaciones", dijo Bergonzi a LA NACION.
"Como bonistas -destacó- lo vemos bien, pero como argentinos quisiéramos que se resuelva la cuestión de una vez por todas honrando las deudas. Esto no se va a pagar con dinero, sino con bonos, pero no aceptamos lo mismo que aquellos que entraron a los canjes, porque ellos lo aceptaron voluntariamente y nosotros esperamos hace 11 años. De todos modos, el tratamiento igualitario que marca la corte de apelaciones no está pensado para que reciban lo mismo, sino, como mucho, como un pago a cuenta de una negociación que debería hacerse en el juzgado."
Bergonzi y Horacio Vázquez, también de Adapd, admitieron que no esperaban un fallo de estas características, a casi 11 años del default. "Nosotros tratamos de contener a la gente, porque son personas mayores", indicó Bergonzi.
Antes de 2001
A diferencia de los grandes fondos de inversión, la mayoría de los bonistas individuales compró sus bonos antes del default de 2001; algunos de ellos ya lograron sentencias firmes en la Argentina o en EE.UU., pero siguen a la espera de poder cobrar, muchos de ellos, antes de morirse.
"Existe un grupo de argentinos que compraron bonos soberanos como medio de ahorro para resguardar su futuro antes del default; no son instituciones financieras, pero nuestros gobiernos decidieron no devolverles el dinero, luego de licuar deudas a los más poderosos", expresó Vázquez.
El ahorrista aclaró que "es una lástima que se haya tenido que llegar a estas instancias, como el embargo de la Fragata o este fallo, para que nuestro país se vea compelido a respetar las obligaciones contraídas".
Antes de fines de año, prevén que el juez Griesa deberá definir cuál es la fórmula de pago para beneficiarlos: si les da lo mismo que a los que ingresaron en el canje o el 100% de lo que reclaman, un criterio que la cámara de apelaciones dejó explícitamente a criterio del magistrado del sur de Manhattan.
En cambio, el Gobierno cree, según indicaron fuentes oficiales a LA NACION, que Griesa puede rever parte del fallo de segunda instancia y no tener que ponerlo en la incómoda opción de pagarles a los bonistas que no aceptaron las ofertas con quita de deuda que ofreció el país en dos oportunidades en los últimos siete años, para no caer en default.
"Esto está lejos de haber terminado: queda ver qué hace Griesa y luego qué pasa con el eventual pedido de apelación ante la Corte Suprema", dijo un funcionario que participa de la sensible cuestión, shockeado por la sucesión de malas noticias desde el embargo de la Fragata Libertad a principios de mes en Ghana.
En su decisión, los camaristas Rosemary Pooler, B.D. Parker y Reena Raggi interpretaron que la Argentina discrimina a estos tenedores de deuda frente a los que aceptaron los canjes, al hacer lugar a una amplia interpretación de la cláusula pari passu que ordena pagarles en forma proporcional.
"El tribunal entiende que la Argentina violó esta decisión cuando realizó pagos bajo el actual régimen de cambio de bonos, mientras mantenía su negativa a satisfacer las obligaciones de pago de los demandantes y cuando sancionó la ley cerrojo y su suspensión", indicaron los jueces.
Abogados que representan a otros fondos de inversión indicaron que esperaban un fallo más acotado, focalizado en una crítica a la ley cerrojo, por la cual la Argentina cerró el camino para pagarles a los acreedores que no aceptaran los canjes.
Sin embargo, cerca de los fondos más agresivos afirman que esta ley votada por el Congreso, en realidad, no le impide a la Argentina el cumplimiento efectivo del pago de las sentencias desfavorables al país, por lo que habría un resquicio legal para ejecutarlas.
Preocupación de la UIA
El presidente de la Unión Industrial Argentina, José Ignacio de Mendiguren, reconoció ayer que existe "preocupación" en el sector empresarial por el eventual impacto en la economía que podrían tener los embargos que impulsan los "fondos buitre" contra la Argentina. "Nos preocupa, está claro", señaló en declaraciones radiales, en las que también advirtió sobre la "falta de inversión".
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