Meanwhile In Argentina...

Tyler Durden's picture

Dear Buenos Aires: we have three words of advice - "hide yo' catamarans" (before Paul Singer comes and collects them all once you default again in what the market now deems is inevitable to occur in the next few weeks). 5Y CDS on Argentina just reverse-Baumgartnered to over 3000bps (49/53% upfront) and short-dated CDS imply a 60% probability of default (assuming a 25% recovery).

 

 

Chart: Bloomberg

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Jlmadyson's picture

Timmmmmmmmmmmmber!

Thomas's picture

Get Ben and Timmy on the phone it is time to dust off those JPM and Citigroup (I mean South American bank) bailout documents.

Half_A_Billion_Hollow_Points's picture

Krugman said it's fine.  So all of you STFU!  http://krugman.blogs.nytimes.com/2012/05/03/down-argentina-way/

Krugman said it's fine.

Krugman said it's fine.

Krugman said it's fine.

Krugman said

Krugman said

Krugman

nodhannum's picture

Didn't you really mean Timmmmmmmmieeeeee!

Neethgie's picture

But teh left wing paper in the uk told me argentina was a shining example of socialism?

is dis wrong?

Shoegazer's picture

As much as I despise socialism I think this is more a case of government spending > tax revenues.  This happens a lot under socialism but is not necessarily a defining characteristic.

MachoMan's picture

It has to do with the infrastructure (whips) necessary to procure marginal production...  eventually, spending will always outpace revenue because social functions aren't curtailed to account for the drop in production.  This has to do with many things, but none probably any more prevalent than the absolutely corrupt aspects of absolute power.  In short, I think it would be perfectly acceptable to characterize it as a defining characteristic of socialism.

Thisson's picture

Let's not forget that it's a defining characteristic of our government here in the US too. 

ffart's picture

I think it is a shining example of socialism.

EscapeKey's picture

I don't see anything inaccurate about that statement.

Argentina are world champions when it comes to socialism. They keep running out of their citizens' money. Over, and over, and over again.

Snake's picture

Aren't the US and Europe ... the best example of capitalism?

marathonman's picture

They would be the best examples of crony capitalism aka fascism.  It work for Adolf and Benito.  It works here too.

nodhannum's picture

Not to worry tovarich...the Obammie phones are on their way!

LongSoupLine's picture

Quick...call Madona!

swissaustrian's picture

Paul Singer is hedging his own bets

monopoly's picture

Now that is an interest rate I could live with....Oh, it is going to get worse. Never mind.

Phroneo's picture

They already defaulted before so why again? Did they not do it properly? Did they not learn their lesson?

Marco's picture

The US courts are denying their ability to default at all ... that's why any country who goes in debt in a currency they can't print is setting themselves up for a fall.

The US doesn't have this problem, it just runs the presses a little harder.

Things that go bump's picture

Why can't they print it? North Korea does.

augustus caesar's picture

Their currency was pegged to the US dollar from 1991 to the crisis in 2001 and subsequent default. Early in 2002 their currency was unpegged. US dollar denominated financial contracts were forceably converted into peso-denominated contracts with renogiated terms. You can clearly see just how much it helped the situation.

Earl of Chiswick's picture

and back in the USA on Bloomberg TV right now Simpson and Bowels

Simpson - we will go over the cliff

Bowels - markets will collapse

 

Simpson - "Healthcare is what is driving the trainwreck, it's on autopilot - the guy who gets diddled is the little guy"

Simpson on Bowels - "he's a sensitive wise guy"

 

 

Bicycle Repairman's picture

Alan Simpson?  Isn't he the 'Simpson' in the 1986 Simpson-Mazzoli Act that granted amnesty to millions of illegal immigrants?  Sounds like a corporatist stooge.

I think I'd rather listen to Homer Simpson.

LongSoupLine's picture

Wait a minute...isn't Corzine "vacationing" in Argentina?

 

hmmmmm....

NEOSERF's picture

A Trillion here, a trillion there and pretty soon we are talking about some real pesos...

pods's picture

That is No Bueno.

 

Confundido's picture

But, but Krugman and Stiglitz said Argentina is an example!

swissaustrian's picture

yeah and that Iceland is irresponsibly fucking foreign creditors.

Half_A_Billion_Hollow_Points's picture

"Economic Science" = Bank Profit Science

Bam_Man's picture

Default on what? They have been shut out of global capital markets since their last default in 2001. What is this they are defaulting on now? Some loans that they forgot to default on last time and kept paying interest on? When it comes to the Argentinians, you cannot make this sh*t up.

BTW, how do you say "Double-dog default" in Spanish?

nodhannum's picture

No soup for you Bam_Man!

TruthHunter's picture

 "Double-dog default" in Spanish?

 

defecto perro doble

 

Sounds like a dance...

medanbola's picture

Argentina restructured its debt with 93% of bondholders and is current. Has money to pay as debt/gdp is < 35%. Paul Singer and his lawyers trying to make a buck, and screwing all other bondholders. He is buying more CDS now and he is a member of the ISDA committee that will determine if an event of default occurs. Who is the jerk? again guys, 35% debt/gdp, and only 18% owned to foreign investors. The rest is local debt with govt agencies. Let him short it.

Snake's picture

The idea that Argentina will "default again in what the market now deems is inevitable to occur in the next few weeks" is preposterous.  Shows (at best) an absolute ignorance of Argentina's true economic and financial situation.  In fact, the whole frigate (cum griesa) thing is just a media coup timed up to prevent the Argentine example from spreading (to Greece, Spain, France, et al).  Of course, this is just ... a reading :)) and I should add "IMHO" :))

Shoegazer's picture

"Of course we'll pay you back!  Hold on while the printer warms up."

alex_g's picture

"In fact, the whole frigate (cum griesa) thing is just a media coup timed up to prevent the Argentine example from spreading"

 

What example?  Default on your debt, then spend spend spend to stay elected, spend so much that you compete with the private sector for goods and services, which drives up inflation to over 25%?  Create capital controls to keep productive people and money from leaving?  Politically motivated price controls?  Plundering private pension plans?  Sounds great!

Bam_Man's picture

Coming soon to a country near you!

Snake's picture

is that your reading? you should add IMHO ...

Head_Shots_Work's picture

Singer better watch his ass. Any time you fuck with a neighbor that has an army you could end up dead. Unless Singer has an army - which - based on what is about to happen is something all major hedge funds should think about investing in. Think of it as the penultimate hedge.

americanspirit's picture

A great opportunity to invest 100% of your capital in Doug Casey's hideaway community in Argentina. All your gold and silver will be safe there too.

medanbola's picture

Hey Alex_g, why do I have the feeling that you were out in Argentina banging pots and pans last Nov 8.

SillySalesmanQuestion's picture

Maybe Paul Singer will buy Honorable Jon for pennies on the dollar and hold him for ransom until Jamie and Blythe buy him back with the stolen MF Global funds....

TNTARG's picture

Tyler, I'm surprised.

There are some hedge funds that didn't agree to the restructuring terms after the default. Funds as Elliot who bought defaulted bonds for nothing and now want the full price. Argentina's government just said no. That's all.

This is correct:

"Argentina restructured its debt with 93% of bondholders and is current. Has money to pay as debt/gdp is < 35%. Paul Singer and his lawyers trying to make a buck, and screwing all other bondholders. He is buying more CDS now and he is a member of the ISDA committee that will determine if an event of default occurs. Who is the jerk? again guys, 35% debt/gdp, and only 18% owned to foreign investors. The rest is local debt with govt agencies. Let him short it"

It isn't Argentina who is going to default, folks. Already done.

TNTARG's picture

Sorry. Double posted.

youngman's picture

A lot of Americans own property there...some on the books some not I think....Argentina imports from Brazil are down 15% this year....their major trading partner...inflation is 30% or more...I agree here they go again....

archon's picture

The banksters have been using Argentina for "practice", as they load up for bigger game.  Next up - the USA and EU...