Argentina defaulted on its debts back in 1999.
A socialist government came to power.
They nationalized private pensions.
Everybody in the west fawns over their impressive economic growth
Until....
it looks like they're going to default again DESPITE nationalizing foreign interests.
I'm still trying to figure out how Argentina not only got access to the capital markets after it stiffed its creditors 13 years ago, but how private western companies thought it would be a good idea to invest there.
Oh well, everybody enjoy that decline!
5 comments:
These ventures from banks are covered by governments, are they not?
Perhaps not always. But banks on the Canadian model can and have covered massive losses on commercial transactions by upping the fees for their consumer banking.
One way or another it comes out of the hide of the taxpayer, or the ordinary bank customer.
It looks like they are stiffing a Spanish company that was in partnership with Argentina.
Argentina decided that it deserved 51% of the company, and the Spaniards could go pound sand.
But hey, what could go wrong going into business with a country that routinely re-issues it's currency to put more 0's on the money. (Hyperinflation, anyone?)
Spain probably did ok - they know all about defaulting on their creditors, and probably worked that risk into the contract terms. Spain, after all, has Argentina beat on this - they defaulted 6 times in the 16th Century, and several times since.
http://www.nytimes.com/2010/09/04/your-money/04money.html?_r=1&src=me&ref=general
This guy just saved himself from marrying a women with $170,000 student debt for a photography degree.
"Press the big button on top of the camera to take a picture"
I run a discounted course, you now owe me $20k.
How do the Argentines get credit after stiffing their creditors? Because the people buying the debt aren't the ones who will pay when that debt goes south. They get their commissions and they're off to another bank or brokerage, and then there's the whole credit default swap scam...
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