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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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Fri, 11/16/2012 - 11:51 | 2987902 Jlmadyson
Jlmadyson's picture

Timmmmmmmmmmmmber!

Fri, 11/16/2012 - 12:00 | 2987940 Thomas
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.

Fri, 11/16/2012 - 16:22 | 2989395 Half_A_Billion_...
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

Fri, 11/16/2012 - 12:48 | 2988269 nodhannum
nodhannum's picture

Didn't you really mean Timmmmmmmmieeeeee!

Fri, 11/16/2012 - 11:53 | 2987909 Neethgie
Neethgie's picture

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

is dis wrong?

Fri, 11/16/2012 - 12:00 | 2987947 Shoegazer
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.

Fri, 11/16/2012 - 12:09 | 2987982 MachoMan
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.

Fri, 11/16/2012 - 12:30 | 2988155 Thisson
Thisson's picture

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

Fri, 11/16/2012 - 12:01 | 2987953 ffart
ffart's picture

I think it is a shining example of socialism.

Fri, 11/16/2012 - 12:33 | 2988177 EscapeKey
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.

Fri, 11/16/2012 - 12:49 | 2988201 Snake
Snake's picture

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

Fri, 11/16/2012 - 13:27 | 2988489 marathonman
marathonman's picture

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

Fri, 11/16/2012 - 12:50 | 2988278 nodhannum
nodhannum's picture

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

Fri, 11/16/2012 - 11:54 | 2987911 LongSoupLine
LongSoupLine's picture

Quick...call Madona!

Fri, 11/16/2012 - 11:55 | 2987918 swissaustrian
swissaustrian's picture

Paul Singer is hedging his own bets

Fri, 11/16/2012 - 11:55 | 2987921 monopoly
monopoly's picture

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

Fri, 11/16/2012 - 11:55 | 2987923 Phroneo
Phroneo's picture

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

Fri, 11/16/2012 - 12:10 | 2988010 Marco
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.

Fri, 11/16/2012 - 12:54 | 2988302 Things that go bump
Things that go bump's picture

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

Fri, 11/16/2012 - 18:05 | 2989807 augustus caesar
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.

Fri, 11/16/2012 - 12:03 | 2987928 Earl of Chiswick
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"

 

 

Fri, 11/16/2012 - 14:45 | 2988921 Bicycle Repairman
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.

Fri, 11/16/2012 - 11:58 | 2987931 LongSoupLine
LongSoupLine's picture

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

 

hmmmmm....

Fri, 11/16/2012 - 12:00 | 2987944 NEOSERF
NEOSERF's picture

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

Fri, 11/16/2012 - 12:06 | 2987972 pods
pods's picture

That is No Bueno.

 

Fri, 11/16/2012 - 12:06 | 2987974 Confundido
Confundido's picture

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

Fri, 11/16/2012 - 12:19 | 2988080 swissaustrian
swissaustrian's picture

yeah and that Iceland is irresponsibly fucking foreign creditors.

Fri, 11/16/2012 - 16:25 | 2989412 Half_A_Billion_...
Half_A_Billion_Hollow_Points's picture

"Economic Science" = Bank Profit Science

Fri, 11/16/2012 - 12:15 | 2988039 Bam_Man
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?

Fri, 11/16/2012 - 12:51 | 2988288 nodhannum
nodhannum's picture

No soup for you Bam_Man!

Fri, 11/16/2012 - 14:01 | 2988670 TruthHunter
TruthHunter's picture

 "Double-dog default" in Spanish?

 

defecto perro doble

 

Sounds like a dance...

Fri, 11/16/2012 - 12:14 | 2988047 medanbola
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.

Fri, 11/16/2012 - 12:32 | 2988157 Snake
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" :))

Fri, 11/16/2012 - 12:44 | 2988241 Shoegazer
Shoegazer's picture

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

Fri, 11/16/2012 - 12:49 | 2988274 alex_g
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!

Fri, 11/16/2012 - 12:55 | 2988311 Bam_Man
Bam_Man's picture

Coming soon to a country near you!

Fri, 11/16/2012 - 13:05 | 2988361 Snake
Snake's picture

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

Fri, 11/16/2012 - 12:48 | 2988268 Head_Shots_Work
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.

Fri, 11/16/2012 - 12:57 | 2988321 americanspirit
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.

Fri, 11/16/2012 - 13:02 | 2988340 medanbola
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.

Fri, 11/16/2012 - 13:17 | 2988438 SillySalesmanQu...
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....

Fri, 11/16/2012 - 14:00 | 2988668 Overflow-admin
Overflow-admin's picture

¡Que lo parió!

Fri, 11/16/2012 - 14:14 | 2988730 TNTARG
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.

Fri, 11/16/2012 - 14:16 | 2988731 TNTARG
TNTARG's picture

Sorry. Double posted.

Fri, 11/16/2012 - 15:10 | 2989019 youngman
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....

Fri, 11/16/2012 - 17:11 | 2989632 archon
archon's picture

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

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