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Kubler-Ross Goes To Buenos Aires

Tyler Durden's picture


Argentina's bonds suffered one of their largest single-day price drops on record today as it appears ever more obvious that a re-default will occur. With Elliott still battling over holdouts from a prior life, it seems the smart-money is long-gone this time leaving the momentum-chasing yield-grabbing flow suddenly fully cognizant that the bonds are in fact dead. 'Acceptance' is upon us as we wrote a month ago: "As for the Argentina vs Elliott bare-knuckled match, enjoy it while you can: very soon the Latin American country will likely proceed with yet another round of creeping selective defaults, exchange offers, consent solicitations, and other debt reorganizations, which will make the current free-for-all into a total and epic labyrinth of creditors, interests, bondholder classes, general unsecured claims, and other total confusion."


We continued:

After all why bother with Argentina: there are far higher IRRs to be generated by shorting local-law Spanish bonds while buying their international-law cousins. In fact, courtesy of the current government's arrogance and naivete, the position can be put on in a cost, and carry, neutral basis. Then sit back and just wait for the spread to blow out.

Because what is happening with Argentina today, is coming very soon to every banana republic near you.

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Thu, 11/22/2012 - 12:10 | 3004568 slaughterer
slaughterer's picture

Argentina, USA--difference just a matter of time. 

Thu, 11/22/2012 - 12:19 | 3004591 centerline
centerline's picture

Middle class wipeout coming up.

I am enjoying the hell out of this incredible supply chain while it still functions.  Despite the economy circling the drain, the food and circuses are in full swing.  Prices are up, but the quality and selection is incredible.  More so than I have ever seen.  Going to enjoy another great meal today and am thankful for it in a way that the rest of my family is clueless about.

Thu, 11/22/2012 - 18:52 | 3005241 Offthebeach
Offthebeach's picture

If the middle class collapses, I'll be in the middle class, maybe upper as America dives for the economic canyon floor, so I got that going for me, which is nice.

Thu, 11/22/2012 - 12:21 | 3004602 Unprepared
Unprepared's picture

From such a serial defaulter country, two lessons may be learned:


1 - The smart money isn't smart after all, and/or

2 - (selective) defaults are not as catastrophic as some want to make pigs believe

Thu, 11/22/2012 - 14:04 | 3004869 fonestar
fonestar's picture

Who the fuck buys bonds anyway?  Oh right, "sophisticated investors" do....

Thu, 11/22/2012 - 12:12 | 3004572 cesarsp_us
cesarsp_us's picture

Get ready to do the tango

Thu, 11/22/2012 - 12:13 | 3004574 dwdollar
dwdollar's picture

I consistently underestimate the number of fools in this world who are in the process of being parted with their money.

How long has Argentina been a financial mess? How long has "smart" money been lending to them? Is this really going to change anything?

Thu, 11/22/2012 - 14:40 | 3004958 Omen IV
Omen IV's picture

Argentina is not "a financial mess" - it is in motion to fuck the banks !

their success and that of Iceland is the path to the future

Thu, 11/22/2012 - 12:24 | 3004612 westboundnup
westboundnup's picture

There was a popular saying back in the 1930's "Rich as an Argentine".  Someone could write a great piece on what occured between now and then.  I fear the USA could follow a very similar path.

Thu, 11/22/2012 - 12:30 | 3004629 Bicycle Repairman
Bicycle Repairman's picture

At the dawn of the 20th century, Argentina was 5th in the world in GNP.  It was ahead of the USA.  The story of Argentina's downfall is probably very interesting.  Spoiler alert:  Banks!

Thu, 11/22/2012 - 12:39 | 3004660 akak
akak's picture


There was a popular saying back in the 1930's "Rich as an Argentine".  Someone could write a great piece on what occured between now and then.

Someone could do that, but why do it, when one word will suffice: statism.

Thu, 11/22/2012 - 13:02 | 3004712 NorthPole
NorthPole's picture

Then Peron came, and cast the country into the statist hole. Sadly he had a popular (read:pretty) wife Evita, who carried on for a few more years still.  Even worse, popularity of the Peron duo carried their party, the peronistas, to power a few more times still, wreaking havoc left and right. Kirchner is a post-peronista.

I always had the impression that a lot of LatAm problems stem from the fact that for decades, those countries were torn between a right-wing dictatorship, and a left-wing utopia. When the leftists got their asses kicked they become martyrs and this very fact magically made their economic views credible. If you were against communism and statism, you were automatically labelled a supporter of the dictatorship. Thus, there was no room for any libertarian views.

Same in Southern Europe, actually.

Thu, 11/22/2012 - 16:33 | 3005136 samcontrol
samcontrol's picture

lol,,, a few words, miami, soy beans , banks, cows , offshore , Argentines , wine , oil, corn . My english is bad , put them in a sentence.

Thu, 11/22/2012 - 16:35 | 3005137 samcontrol
samcontrol's picture

oh i forgot pm mines..

Thu, 11/22/2012 - 12:27 | 3004619 Eally Ucked
Eally Ucked's picture

And who cares? Every single country in this world is in debt, so where is that money to lend is coming from? Thin air producing interest? 

Thu, 11/22/2012 - 12:34 | 3004639 buzzsaw99
buzzsaw99's picture


Thu, 11/22/2012 - 12:34 | 3004641 DavosSherman
DavosSherman's picture

Smart to dumb money rotation---Classic!

Thu, 11/22/2012 - 13:03 | 3004715 ebworthen
ebworthen's picture

+1, You beat me too it.

Same pattern for Apple, Chipotle, and eventually U.S. Treasuries.


Thu, 11/22/2012 - 13:20 | 3004748 Downtoolong
Downtoolong's picture

what is happening with Argentina today, is coming very soon to every banana republic near you

Even now, it seems to beg a basic question for all the global minded central planners of the world -

Why is Greece more important to save and bailout than Argentina?

Are they truly protecting economic value in the world, or just the price of the debt held by the TBTF and central bankers of the world?

Fri, 11/23/2012 - 00:11 | 3005644 Tyler Durden
Tyler Durden's picture

On its own Greece is absolutely irrelevant. As part of the Eurozone, where a Greek failure threatens the redenomination of the national pre-EUR currencies, once it becomes evident that "it can happen" and the remaining PIIGS or PIIS scramble to put their savings in Europe's core, draining the local banks of all liquidity and leading to a collapse of the Eurozone and trillions in reserve counterparty liabilities and is thus a domino to the end of the status quo, Greece is absolutely critical.

Thu, 11/22/2012 - 13:19 | 3004758 Seize Mars
Seize Mars's picture

To paraphrase George Carlin, Kirchner is in the club. You ain't, American taxpayer.

Thu, 11/22/2012 - 14:43 | 3004967 HedgingInfinite...
HedgingInfiniteRiskIsNotPossible's picture

They should have been priced at zero from day one.

Thu, 11/22/2012 - 16:27 | 3005130 medanbola
medanbola's picture

Have you tried to overimpose an S&P chart over the Arg chart...you ZH smart money, Tyler smart guy? Then tell me who the banana republic is, if you can differentiate the charts. You talk so much BS about correlation, you may talk now and leave all the other BS aside. Just talk when and if NML collect. The name of your website should be "I told you so". Where are you invested now, genius?

Thu, 11/22/2012 - 16:37 | 3005138 samcontrol
samcontrol's picture

actually , a great post .

Thu, 11/22/2012 - 18:03 | 3005204 Seize Mars
Seize Mars's picture

There are no investments. Genius.

Thu, 11/22/2012 - 19:17 | 3005270 Tommy Gunner
Tommy Gunner's picture

Here's a speech by Miko Peled whose father was a general in the Israeli army, he discusses the origins of the conflict, how Palestinians and Israelis are the same people, how they can get along

Sad to watch.


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