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With 1 Week Left Until Argentina's 'D'efault-Day, Judge Blasts "Judgments Are Judgments"

Tyler Durden's picture




 

Day after day, headlines from Argentina implore Judge Griesa to do the "fair, responsible" thing and lift his judgment that holdouts get paid before current bondholders receive their payments... and day after day Argentina's demands are met with silence or denials. Today, though, with 1 week left until Argentina must put up or shut up, Judge Griesa has come out swinging...

  • *U.S. JUDGE SAYS OF ARGENTINA RULINGS: 'JUDGMENTS ARE JUDGMENTS'
  • *ARGENTINA'S 'INCENDIARY` RHETORIC `UNFORTUNATE,' JUDGE SAYS
  • *U.S. JUDGE URGES 'SENSIBLE STEPS' TO AVOID ARGENTINA DEFAULT

While CDS spreads have surged once again, bonds trade with default probabilities around only 50% which, according to Jefferies "are expensive on underestimating the risk of default."

 

 

As Bloomberg reports,

U.S. District Judge Thomas Griesa declined to rule immediately on calls by holders of defaulted Argentina bonds to bar payment on some dollar- and yen-denominated debt in a hearing in Manhattan federal court.

 

Argentina had asked the judge to delay rulings that bar the country from making payments on its restructured debt before paying holders of defaulted bonds as it faces a possible second default this month.

 

The South American nation renewed its request for a delay so it can negotiate without risking liability for what it argues could be billions of dollars in new claims by holders of defaulted and restructured bonds. That request has yet to be addressed.

 

Today, Griesa began the proceedings by hearing arguments about whether his orders bar payments to holders of U.S. dollar-denominated exchange bonds issued under Argentine law and payable in that country, without a corresponding payment to holders of the defaulted bonds.

Judge Griesa is not happy...

  • *U.S. JUDGE URGES `SENSIBLE STEPS' TO AVOID ARGENTINA DEFAULT
  • *U.S. JUDGE REAFFFIRMS RIGHTS OF DEFAULTED ARGENTINA BONDHOLDERS
  • *U.S. JUDGE SAYS OF ARGENTINA RULINGS: `JUDGMENTS ARE JUDGMENTS'
  • *GRIESA CITES ARGENTINA REFUSAL TO PAY NUMEROUS COURT JUDGMENTS
  • *ARGENTINA'S `INCENDIARY` RHETORIC `UNFORTUNATE,' JUDGE SAYS
  • *ARGENTINA DEFAULT `WOULD BE MOST UNFORTUNATE' U.S. JUGDE SAYS
  • *ARGENTINA DEFAULT JUDGE SAYS WE HAVE ARRIVED AT 'CRUCIAL TIME'
  • *U.S. JUDGE CITES ARGENTINA'S `OBLIGATIONS' TO BONDHOLDERS
  • *ARGENTINA BOND PARTIES MUST MEET WITH MEDIATOR `CONTINUOUSLY'

Jefferies warns bonds are underestimating the risk...

Argentine bonds sold under New York law due 2033 “are expensive on underestimating the risk of default,” which is 50% and increasing, Siobhan Morden, the head of Latin America strategy at Jefferies Group, wrote in a report today

*  *  *
Argentina will enter into technical default on its restructured bonds on July 30 unless it reaches an agreement with the holdouts.

The clock is ticking... and Argentina is furious...

  • *ARGENTINA LAWYER SAYS COURT ORDERS RISK 'IMMINENT' DEFAULT
  • *ARGENTINA LAWYER SAYS JULY ACCORD FACES `HUGE CONSTRAINTS'

Three weeks after President Cristina Fernandez de Kirchner sent $539 million to pay bondholders, the money remains in limbo as a U.S. court considers what to do with the funds.

 

Fernandez said on July 16 the country can’t default because it sent the funds to the banks, and now it’s the responsibility of bondholders to demand payment from the judge and intermediary banks.

 

“Only countries that stop paying their debt fall into default,” Fernandez said at a conference in Brazil. “Argentina will keep paying its debt and meeting its obligations.”

We shall see...

We leave it to Judge Griesa to conclude...

"IN MY VIEW, EVERY SINGLE PROBLEM YOU'VE [ARGENTINA] DESCRIBED IS SUSCEPTIBLE TO BE HANDLED IN A SETTLEMENT...

 

IF WE DON'T, THERE WILL BE A DEFAULT, AND THAT IS THE WORST THING."

Bond prices are falling after the judge's latest ruling...

 

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Tue, 07/22/2014 - 12:46 | 4988546 DoChenRollingBearing
DoChenRollingBearing's picture

"No llores por mi, Argentina..."

Tue, 07/22/2014 - 12:49 | 4988569 ShorTed
ShorTed's picture

Kyle Bass getting nervous or doubling down?

Tue, 07/22/2014 - 12:52 | 4988589 john39
john39's picture

>judgments are judgments

what a tool.  what I see is that most judgments these days are uncollectable garbage, not worth the paper they are written on.

Tue, 07/22/2014 - 13:37 | 4988864 Almost Solvent
Almost Solvent's picture

Anyone who has worked collections or BK will know this little gem:

Liability does NOT equal Collectability
OR – Owe the bank $1M and it’s their problem, not yours.

Tue, 07/22/2014 - 14:46 | 4989271 Vampyroteuthis ...
Vampyroteuthis infernalis's picture

Dear bankers, you loaned money to an insolvent South American country a long time ago. Tough luck idiots!!!

Tue, 07/22/2014 - 13:09 | 4988680 Renewable Life
Renewable Life's picture

This global ponzi is sooooooo over leveraged, I could see Argentina being the "first domino" if they don't pull a "Benny Big Bucks" routine out of their ass here!

Tue, 07/22/2014 - 13:16 | 4988715 JLee2027
JLee2027's picture

Argentina has made things abundantly clear. No means no. It's the Judge that doesn't get it.

Tue, 07/22/2014 - 14:35 | 4989217 CrashisOptimistic
CrashisOptimistic's picture

That works until they have to borrow more, which they must.

Tue, 07/22/2014 - 14:41 | 4989244 JLee2027
JLee2027's picture

As does everyone. In history, the only answer was a debt jubilee every 50 years. It makes sense to bring it back.

Tue, 07/22/2014 - 17:23 | 4990113 presidentsarkozy
presidentsarkozy's picture

OH THAT S UTTER RUBBISH .

DEBT JUBILEES ARE FOR LAZY LATINS IN SOUTH AMERICAand southern eurooe --SEE THE OATTERN ALL TIED BY O E RELIGION WHICH WASHES AWAY SINS AND SO BY INFERENCE CAN WASH AWAY DEBTS .

MAN UP AND PAY YOUR DEBTS OR GO TO INTERNATIONAL BANKRUPTCY ORISON .

IS THE POPE ARGENTINIAN ???

ohh...wait a monent ..

Tue, 07/22/2014 - 19:03 | 4990608 jez
jez's picture

Whatever nationality the Pope is, he could offer up a "bankruptcy orison".

 

Oh man, the wit.

Tue, 07/22/2014 - 16:42 | 4989902 DR
DR's picture

UPDATE 1-China lends Argentina $7.5 billion for power, rail projects

Sat Jul 19, 2014 2:27am BST

(Reuters) - Argentina signed deals on Friday to borrow $7.5 billion from China at a time when the Latin American country cannot tap global capital markets because of disputes over unpaid debt.

Among the deals signed, Argentine President Cristina Fernandez and her Chinese counterpart, Xi Jinping, agreed on a loan for $4.7 billion from the China Development Bank.....

http://uk.reuters.com/article/2014/07/19/argentina-china-idUKL2N0PT2N220...

Tue, 07/22/2014 - 22:46 | 4991460 Ides of November
Ides of November's picture

I'm pretty sure this means we have our answer about what's going to happen then.

Watch out for the default next week, the same day the US announces Second Quarter GDP and a recession! Oh, happy days. Look for an unexpected 'false flag' July 29/30/31 to distract things.

 

Oh, and welcome to the BRICSA! or BRIACS? BRICAS? Who knows, one of 'em.

Turkey next, when's the Presidential Election again? Must be coming up soonies....

Tue, 07/22/2014 - 13:28 | 4988558 nuclearsquid
nuclearsquid's picture

the two sweetest words... De Fault

Tue, 07/22/2014 - 12:47 | 4988559 buzzsaw99
buzzsaw99's picture

hey argentina, tell griesa to stick it up his ass

Tue, 07/22/2014 - 13:25 | 4988789 JLee2027
JLee2027's picture

The rule of law died in the US years ago. It's nice to see open defiance finally beginning.

Tue, 07/22/2014 - 13:48 | 4988953 doctor10
doctor10's picture

Could be wrong-but it looks like that is exactly what's happening here!!

Tue, 07/22/2014 - 17:24 | 4990124 presidentsarkozy
presidentsarkozy's picture

fuck off pillock . a debt us a debt .. pay it !!!

Tue, 07/22/2014 - 12:48 | 4988567 agent default
agent default's picture

And debts that cannot be repaid will not be repaid.  Sorry judge :P.

Tue, 07/22/2014 - 12:50 | 4988581 Boomberg
Boomberg's picture

Just thankful that somebody knows how to spell "judgment".

Tue, 07/22/2014 - 12:51 | 4988584 Syrin
Syrin's picture

I used to think a nation couldn't get more f'd up than Argentina/Venezuela/North Korea.   Then the liberals took over

Tue, 07/22/2014 - 12:55 | 4988607 Kaiser Sousa
Kaiser Sousa's picture

Argentina aint even trippin off these fucking vulture funds and the banker owned protectors in the US judicial branch...
Uncle Xi Jinping dropped by with some loan guarantees, trade agreements, and reminbi swaps...
FUCK OFF wall st., and banker owned US government..
and...

"Chinese President Xi Jinping has signed a row of oil and mineral deals with Venezuela. The Chinese leader is on a four-country tour of Latin America aimed to increasing influence in the region.

The 38 economic agreements are related to the production and development of Venezuelan oil and agriculture, as well as social and cultural expansion, says the BBC. The deals provides a credit line of $4 billion in return for Venezuelan oil and oil products, as well as allocating $691 million to explore Venezuela's gold and copper reserves, and an agreement to develop the countries' third jointly-owned satellite.

China is the second-largest market for Venezuelan oil after the United States.

The underlying purpose of the visit has been to secure more natural resources from Latin America to fuel China's long term economic expansion, BBC cites analysts. The Venezuela negotiations were preceded by visits to Brazil and Argentina.

At the BRICS summit in Brazil the Chinese leader, along with the other emerging powers Brazil, Russia, India and South Africa, launched a $100 billion BRICS Development Bank and a reserve currency pool worth over another $100 billion. Both will counter the influence of Western-based lending institutions and the dollar.

Read more: BRICS establish $100bn bank and currency pool to cut out Western dominance

The next stop was Argentina where President Xi Jinping agreed an $11 billion currency swap and extended much-needed investment to President Cristina Kirchner. Argentina’s economy has been locked out of the international capital markets since defaulting on its debt in 2001, and is staring down the possibility of another default."

http://rt.com/business/174588-china-oil-deal-venezuela/

Tue, 07/22/2014 - 12:57 | 4988618 NOTaREALmerican
NOTaREALmerican's picture

Guess the top 1% in Argentina are going to have to decide who their daddy is.  

Tue, 07/22/2014 - 13:03 | 4988635 Dr. Engali
Dr. Engali's picture

"The clock is ticking... and Argentina is furious..."

 

You agreed to take on the debt according to their terms in the first place you fucks. If you can't meet the terms then restructure, if you can't restructure then default, but the best thing to do is not take on debt you have no way of repaying.

Tue, 07/22/2014 - 13:29 | 4988812 JLee2027
JLee2027's picture

You mean they were forced into these terms, nearly 20 years ago, accept these terms or no money.

When they did falter, they did settle with 97% of the creditors 10 years ago, these are the holdouts 3% that would not accept the prior settlement (debt swap terms) and wanted full repayment, which is Argentina did that, would allow the orignal 97% to demand the same thing.

Nope, never going to happen.

Am I wrong?

Tue, 07/22/2014 - 14:13 | 4989080 Sun and Moon
Sun and Moon's picture

How cruel and insensitive of those creditors to insist the Argentina agree to repay the money they were borrowing!

Argentina "settled" 10 years ago by paying pennies on the dollar. Creditors were told they could accept that or nothing.

Of course, I don't really have much sympathy for the creditors. Argentina is a serial defaulter that has stiffed creditors seven times since independence in 1816. So anyone who would loan to Argentina would have to be loco.

 

Tue, 07/22/2014 - 14:38 | 4989218 JLee2027
JLee2027's picture

How cruel and insensitive of those creditors to insist the Argentina agree to repay the money they were borrowing!

You should check the terms they were forced into before you make that declaration. 

 

 

Of course, I don't really have much sympathy for the creditors. Argentina is a serial defaulter that has stiffed creditors seven times since independence in 1816. So anyone who would loan to Argentina would have to be loco.

Virtually every country on Earth is deeply in debt that will never be repaid. What makes this so different?

Tue, 07/22/2014 - 14:43 | 4989262 Sun and Moon
Sun and Moon's picture

They might have gotten much better terms if they hadn't defaulted so many times in the past!

And in any case, if the terms were so terrible they shouldn't have agreed to the loans. I personally think that the only reason Argentina agreed to the terms was that they never had any intention of repaying the loans. Argentina suckered yet another round of "investors".

Tue, 07/22/2014 - 15:12 | 4989386 JLee2027
JLee2027's picture

And in any case, if the terms were so terrible they shouldn't have agreed to the loans

I agree, but people desperate for money will sign anything. 

Tue, 07/22/2014 - 17:45 | 4990245 newdoobie
newdoobie's picture

Whoa! hold on there Tex. Argentina's .1% (bankers/politicians) grabbed the cash and sold out the country. (over and over again) If bankers in the US weren't getting their own cuts they wouldn't have loaned them anything.

Tue, 07/22/2014 - 14:41 | 4989248 CrashisOptimistic
CrashisOptimistic's picture

Yeah, wrong.

The 97% got rolled.  Argentina threatened to not pay and restructured to pay less and those creditors agreed.  This doesn't mean the other 3% are bound by it.  In fact, the law says specifically that they are not bound by it.

The 3% loans didn't get borrowed as part of the 97%.  They were seperate.  Every single piece of paper is seperate and has to be paid or restructured.  The fact 97% got rolled does not make the 3% evil for demanding their particular loan agreement be adhered to.

Saying that if they pay the 3% fully means the 97% can demand full payment . . . is no different than saying the 3% didn't get paid at all so the 97% should not be paid at all.

Tue, 07/22/2014 - 15:24 | 4989465 ozzzo
ozzzo's picture

Nonsense. The 3% (AKA vulture funds) did not loan any money to Argentina nor anyone else. They bought up distressed debt for pennies on the dollar and now would like to make incredibly huge profits by collecting dollar for dollar. The interesting question is, what form will their payoff to Judge Greasy-palm take if they are successful? Will he go through the revolving door and end up "consulting" a few hours per year for a six-figure salary, will he be paid princely sums to read speeches that someone writes for him, or will some anonymous organization just contribute to his "campaign?"

Tue, 07/22/2014 - 14:50 | 4989293 Jack4952
Jack4952's picture

Argentina got no "money". It merely got "credit" created out of nothing by hiiting a few key on a computer.

Has anyone here heard of "odious debt"?

Tue, 07/22/2014 - 13:40 | 4988890 Landrew
Landrew's picture

As the pot calls the kettle black. What you really mean is close the IMF and World Bank and allow countries to issue debt in THEIR own currency paid by their own banks?

Tue, 07/22/2014 - 14:20 | 4989096 Dr. Engali
Dr. Engali's picture

No what I really mean is don't take on debt that you have no means nor intention of paying back.It's that fucking simple. If you take on the debt then you have to live with the consequences. The reason these countries can't access the debt markets is because they are serial defaulters and lenders know they plan inflating away their debts much like the U.S is trying to do now. 

Tue, 07/22/2014 - 17:49 | 4990265 newdoobie
newdoobie's picture

But Doc, the country got saddled with the debt. The money went to the bankers and politicians. Kinda reminds you of another country around here doesn't it?

Tue, 07/22/2014 - 13:02 | 4988644 walküre
walküre's picture

They default. What's next? How much of their debt is being held by IMF? Maybe BRICS will make an offer to support Argentina with BRICS funds in exchange for Argentina's commitment to BRICS?

Mme Lagarde, your hand is weaker than you think. There's life outside the "G7" you bitch.

Tue, 07/22/2014 - 13:10 | 4988684 BandGap
BandGap's picture

Or maybe everyone lets them slide under the waves and goes in for cheap salvage.

Tue, 07/22/2014 - 13:17 | 4988734 FrankieGoesToHo...
FrankieGoesToHollywood's picture

There will only be a "default" if the TPTB decide there is a financial gain.  If not, the non-payment will not be catogorized as a credit event and CDS holders will have to pound sand.

 

We've seen this a dozen times before.

Tue, 07/22/2014 - 13:04 | 4988651 GooseShtepping Moron
GooseShtepping Moron's picture

Interesting, but I since I seemed to have missed the development of this story, I'm going to have to go back and read up on it. There are some things I don't understand here. Why is a US Judge ruling on Argentinian bond payments?

Tue, 07/22/2014 - 13:41 | 4988897 Almost Solvent
Almost Solvent's picture

The bonds were offered through Wall Street banks with NY law and jurisdction written in.

That was the stupid part from Argentina's point of view (but they got 'better' intial terms in 2001 through Wall Street instead of issuing them in Argentina under Argentina law).  

Tue, 07/22/2014 - 13:41 | 4988902 GooseShtepping Moron
GooseShtepping Moron's picture

Thanks!

Tue, 07/22/2014 - 17:51 | 4990275 newdoobie
newdoobie's picture

The people who set this up, on the Argentinian side, never planned on paying back anything. As Steve Miller sings they "Go on, Take the money and run"

Tue, 07/22/2014 - 13:04 | 4988653 Quinvarius
Quinvarius's picture

Why do they even listen to this judge?  Is Argentina not a country with its own laws?

Tue, 07/22/2014 - 13:16 | 4988727 NOTaREALmerican
NOTaREALmerican's picture

If they default, the Argentine top 1% won't be able to borrow more money and have shovel ready infrastructure jobs programs to loot.  

Wealth is now measured by the potential for FUTURE borrowing.   

Tue, 07/22/2014 - 17:53 | 4990280 newdoobie
newdoobie's picture

Retired bankers in Argentina "I got mine, go borrow and steal your own"

Tue, 07/22/2014 - 13:17 | 4988740 El Vaquero
El Vaquero's picture

 

Today, Griesa began the proceedings by hearing arguments about whether his orders bar payments to holders of U.S. dollar-denominated exchange bonds issued under Argentine law and payable in that country, without a corresponding payment to holders of the defaulted bonds.

When you dance with the devil...

 

Tue, 07/22/2014 - 13:06 | 4988661 Madcow
Madcow's picture

no worries - I'm sure Gov-Co can simply pass along any investment losses to the US Tax-payer. 

 

Tue, 07/22/2014 - 13:57 | 4989002 IllusionOfChoice
IllusionOfChoice's picture

+1 for Gov-Co, very apt.

Tue, 07/22/2014 - 13:14 | 4988702 monad
monad's picture

You can run but you can't hide!

Tue, 07/22/2014 - 13:16 | 4988720 El Vaquero
El Vaquero's picture

Fuck that judge and fuck Argentina.  You can't get blood from a stone and you shouldn't borrow from the future to live today.  

Tue, 07/22/2014 - 13:29 | 4988810 TNTARG
TNTARG's picture

Hey Vaquero, Argentina is a very rich country.

That's why all this sh..t is going on.

 

Tue, 07/22/2014 - 13:34 | 4988849 El Vaquero
El Vaquero's picture

They overspent in other countries' currencies.  I doubt that judge understands currency and wealth.  USD denominated bonds.  The Argentinian people should guillotine their leaders, tell the bondholders to fuck off and then Argentina should quit borrowing.  

Tue, 07/22/2014 - 13:40 | 4988891 TNTARG
TNTARG's picture

I guess it takes time and some "guys" (and "ladies" as Lagarde) won't be happy...

Tue, 07/22/2014 - 15:45 | 4989594 espirit
espirit's picture

Why not?

This global conundrum is headed for de-globalization anyway.  Might as well swap with the neighbors and let it balance.

Fuck Debt. Free Money, woohoo.

Tue, 07/22/2014 - 13:21 | 4988758 SoDamnMad
SoDamnMad's picture

This just in to MSM news:
"Argentina says Fuk U to  judge and US hedge funds. Will not pay on any of the bonds.  Russia-China to enter swap negotiations with Argentina to support economy.  Russia agrees to send high tech weapons to support Argenina's soverignty including fighters and air defense weapon systems (BUK).  Joint Russian-Chinese naval manuevers with Mistral amphibious ship scheduled in early 2015.  Argentina to sanction US and UK firms and individuals."

How's that for you. 

Tue, 07/22/2014 - 22:47 | 4991470 Ides of November
Ides of November's picture

Can anyone say Falklands? I'm sorry, I mean Malvinas?

Tue, 07/22/2014 - 13:22 | 4988762 TalkToLind
TalkToLind's picture

"I'm fixin' to commensurate this trial here. We gonna see if we can't come up with a verdict up in here."

Tue, 07/22/2014 - 13:24 | 4988783 El_Puerco
El_Puerco's picture

Are the Vulters?, "A Financial Terrorist"...

?_?

(•?•)

 

Saludos...

Tue, 07/22/2014 - 13:24 | 4988784 DonutBoy
DonutBoy's picture

If only GM bond-holders were treated with such respect.  Pays to have a union backing the President

Tue, 07/22/2014 - 13:31 | 4988818 Colonel Klink
Colonel Klink's picture

Long nailguns and short Judges.

Tue, 07/22/2014 - 13:41 | 4988893 Latitude25
Latitude25's picture

In my merciless quest for yield I shall buy some of those Argentina bonds tomorrow.  Risk?  Ha!  What risk?  Everything always goes up invalue in the new normal.

Tue, 07/22/2014 - 13:41 | 4988901 RaceToTheBottom
RaceToTheBottom's picture

Laws have become even less than guidelines.....

Accounting has become fiction...

Prosecutions have become profit centers....

Tue, 07/22/2014 - 14:08 | 4989036 Argieboy
Argieboy's picture

Griesa please send us to the bottom. We need a new 2001 to get rid of the peronist cancer. And maybe some bloodshed to make people realize what we should have done with 12 years of outstanding commodities prices... We should have payed everybody, not asked any single loan again and tell fuck off to any block agreement with FMI/World Bank (NATO/USA/EU) and/or the freaking Brics! We need a Nigel Farage or a Marine Le Pen here. Get all our jews out of the government and start from scratch like we did in 1810. Fuck every other single nation that wants to profit from this country out of debt interests.

Tue, 07/22/2014 - 15:50 | 4989622 espirit
espirit's picture

Default, and fuck the money lenders.

(they'll be back again if there's a peso to be made)

Tue, 07/22/2014 - 17:26 | 4990134 Argieboy
Argieboy's picture

I don't want the bloody jew money lenders again..

Tue, 07/22/2014 - 14:40 | 4989220 Jack4952
Jack4952's picture

I am NOT an expert in international commercial law, but why should the government of Argentina (or any other nation) be bound by the dictates of a U.S. district court judge?

Is not Argentina a SOVEREIGN nation?

 

I do know that a United States District Court (USDC) and a District Court of the United States (DCUS) are NOT the same legal entity.

A United States District Court (USDC) is either an Administrative Article I (legislative) court OR an Article IV Territorial court - neither of which are required to follow the Constitution and in which a man's rights under the Common Law can be ignored. (If you have ever seen a defendant in court speak about the Constitution, ony to have the judge tell him to "Shut up!", then that was a USDC.

A District Court of the United States (DCUS) is an Article III judicial court in which a man can assert his rights guaranteed by the Constitution and/or (if he has the knowledge) file a counter-claim (challenging jurisdiction). Once jurisdiction of any government court has been challenged, that court can NOT proceed with any matters UNTIL that court has PROVED that it has jurisdiction - which (if you are smart) is nearly impossible.

 

At this point the plaintiff (via his counter-claim) can demand his own "court of record" operating under the Common Law ONLY in which he (the plaintiff) or a jury act as the "tribunal" - in which this "tribunal" decides all facts and law in the case; and the "judge" acts ONLY as an administrator and can decide NO issues nor issue any orders. (In a true "court of record", ONLY the Common Law may be used; NO statutes are allowed and NO attorneys may speak (unless as witnesses).

Note: The keeping of a "transcript" does NOT make a court into a true "court of record". Any time anyone in a court cites a statute or regulation, you can be 100% certain that it is NOT a true "court of record", but instead is a "court of no record". A "transcript" is, in fact, called "minutes" and is merely informal records or notes of what occurred in a court. 

 

For more info, see the essay: "On OATHS and JURISDICTION" at    http://JohnHenryHill.Wordpress.com


 

 

 

 

Tue, 07/22/2014 - 14:45 | 4989269 Argieboy
Argieboy's picture

That's the jurisdiction agreed by the "sovereign" authorities of my country and our creditors that decided to enter the debt agreement. Simply as that.

Tue, 07/22/2014 - 19:17 | 4990670 JLee2027
JLee2027's picture

As I responded above, they weren't given a choice. It was their only option to borrow money. Vultures...

Still, off the cuff, I think legalize like this is wrong and unenforceable. As the Judge and Creditors are now finding out to their sorrow.

Tue, 07/22/2014 - 19:36 | 4990720 nostromo17
nostromo17's picture

In Brazil, when I asked a banker how they dealt with the daily runaway inflation back in the mid 90's he said, "Here in Brazil we have a saying,'Find a way...'"

-Later gang, till we meet again. --El Gallego

Tue, 07/22/2014 - 14:50 | 4989297 mototard
mototard's picture

Jack:  The answer is in the article: 

Argentine bonds sold under New York law due 2033 “are expensive on underestimating the risk of default,”

Argentina agreed to seel the bonds under New York law.  Now that there is a dispute, but buyer and seller are stuck with the law under which the deal was made.

Argentina does not have to follow the court ruling as they are a sovereign state, but the cost of them not following the rulings could be high.  Defaults, loss of faith in the govt of Argentina etc etc.

So, Argentina faces a tough choice.  Stick to the law and agreement and take a finanical pounding (if they can afford it) or default and take another massive pounding as the country goes more or less bankrupt.

A sort of Hobbesian choice....

 

 

Tue, 07/22/2014 - 19:35 | 4990741 nostromo17
nostromo17's picture

If they default I am certain Russia or CHina will be glad to lend them some of their crap money, but we will step up to the plate again cause its profitable. Again, no problem, nothing to see here, move on...

Tue, 07/22/2014 - 19:27 | 4990676 nostromo17
nostromo17's picture

Sometimes there are clauses that tie the bond to a certain locality. Bond settlement practice is usually according to a time of the day in London or New York time. Guessing the bonds might have been issued in a New York jurisdiction?maybe. Anyway all the bond trading of Emerging Markets (except Cuba of course) has historically been centered in the New York Money Center Banks with London and TOkyo second and third in line. London may have taken over but I doubt it. Someone check and correct me if wrong. The Argetinians were trying to swap the bonds into local jurisdiction City and Regional bonds which in fact can be a better credit than Argentina itself...not a bad offer at all.

If you really want to know whats going on try and call a NY money center emerging market bond trading desk if they'll answer the phone and talk to you (fat chance).

Credit default swaps at 4000 or more are RIDICULOUS they are not trading unless someone is desperately in the hole or can somehow float the cost for a year. Basically the default is going to happen at these prices if you can call them prices. These CDS sovereign defaults are priced not to be bought, just screen window decoration. Banco Santander used to do this stuff wonder if they are still in it?

Best thing right now if you own em and can't get your money out is park them in an offshore jurisdiction bank branch and wait or  just take the settlement. IF they are not in a legitamate trading account the idea is shift to offshore branch and wait to maturity if you are under water and there is no default.

If any of these bonds are Eurodollar with no U.S. government bond backing portion they are not subject to U.S. law basically...they are offshore. Have a nice day SEC et al.

Tue, 07/22/2014 - 15:40 | 4989557 rsnoble
rsnoble's picture

I'll believe it when I see it.  

Time and time before.........everything to technically call it a default BUT.......somehow it's not a default.

I'd love to see this shit blow up and go viral but i'm not holding my breath.

Tue, 07/22/2014 - 16:39 | 4989884 tvdog
tvdog's picture

Just everybody stop paying bankers. Everybody. Argentines, Greeks, Spaniards, poor Mericans, poor Brits, everybody. Then tell Shylock he can have his pound of flesh but he's not entitled to collect any blood thereby.

Tue, 07/22/2014 - 17:11 | 4990065 iamtheeggman wh...
iamtheeggman whooooooooooooo's picture

Can Uncle Xi Jinping find time in his schedule for Puerto Rico?

Tue, 07/22/2014 - 19:30 | 4990609 nostromo17
nostromo17's picture

I believe Argentina defaults on bonds about every 15 years...perhaps a little behind schedule on this one?

Why shouldn't they since the bonds are issued with %8.75 percent or higher coupons which are closer to retail credit card rates than any realistic growth estimate for a country.

Its all covered. Remember a while back when around Brady bond time some Citi Bank bonds to South America (don't remember which now sadly) defaulted. Citi and others made their money trading them from issue to default (MORGAN GUaRANTY, MORGAN STANLEY, ING, the investment bank formerly known as SHEARSON, CITI and a bunch more)  and taking coupon payments while they lasted and then at the default wrote off the face value of the bonds as a tax loss. Good deal Gringo bankers.

Its all a game and a farce. Default away Argentina, you deserve it.

As long as "emerging markets" countries are forced to issue unreasonably high coupon bonds there will be defaults and its all good business for everyone. No big deal.

I love the "when and if" issued bond trading the money center banks do when an emerging market issue might come up.

Its all just negotiation now...dump the bonds or after they default and the rest of the "emerging market" bond markets sell off as they will buy some and wait for them to come back,

or if it really dumps and there's no money around, do what was done after '98 crash and sell options on the rebound prices a few months later to provide some liquidity to the market. 

No problem, no problem at all. Just the way things work.

Stop bitching Gringo, you learned to publish false economic statistics from Argentina, lets see how that turns out for you in the end.

--Former InterBank Broker who "owned" the Emerging Market Bond Option market while it lasted...love yah.

REITERATE - Plenty of money made on these already no big deal just disinformation for the peons out there that know nothing of the way money really works in the 50 to 100 million dollar notional unit world. Fuel for the comments section here at Zero Hedge.

 

 

 

Tue, 07/22/2014 - 19:15 | 4990642 nostromo17
nostromo17's picture

TYLER DURDEN! CAN WE BAN THE "JEW MONEY" HATER comments already? Really an unnescessary display of free speech... It makes this place very unclassy. And there is no reason to single out Jews at all. I believe capitalist scum come in all religions nationalities and colors. You jew haters are just showing us what ignorant piss sub-humans you are. Go back to your hole and stay there ignorant scum.

WOody ALlen "D'jou do dis, D'jou do dat? New York City is so antisemetic I hate it."

For example, try trusting a MORMON in business, good luck on that. Love em as friends but...

Protestant work ethic and all that, ever heard of that, sure that excuses a bunch of immoral business behavior.

Wed, 07/23/2014 - 04:33 | 4991906 Argieboy
Argieboy's picture

Fuck off pedophile-woody-allen-money-lender-jew. Already asking for restrictions in our free speech!!!.. LISTEN WELL: FUCK OFF from Argentina. Let alone your call for a socialist/collectivist/kibutz way of life... You people are the worse scum God ever gave us. I would trust any type of Christian (Mormon, Yehovah's witness, XXXChurch) before a money lender... JC expelled them from the temple, and he knew why.

Wed, 07/23/2014 - 05:20 | 4991933 jtlien
jtlien's picture

Argentina may have defaulted 7 times since independence.    Sounds bad.

But the US has defaulted at least 4 times.

  1. 1860;s.   Could not pay debts due to civil war.   Issued  worthless greenback fiat currency.

  2. 1933.   Refused to honor promiss to redeem paper bills in gold to US citizens.

 3. 1971  Refused to honor promiss to redeem paper debt to foreign governments/banks.

 4. 2008  Refused to honor promiss not to monetize debt.   QE1,2,3,4......

 Difference is the US has a large enough military to enforce reserve currency status.   Otherwise we are on the same path.

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