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Argentina Debt "Mediation" Goes Surreal As Neither Side Turns Up For Meeting, Black-Market Peso Tumbles

Tyler Durden's picture


Despite Judge Griesa's demands that the holdouts and the Argentinian government hold "continuous" mediation until the debt conflict is resolved "or fear the worst," this morning's headlines are somewhat surreal:


Argentina decided not to send the economy minister (just a 'delegation') as BTG analysts warn that "all the music from the Argentine government indicates default," and judging by the tumble in Argentina's black-market Peso (Dolar Blue) the last few days, that risk is starting to rise.


As Bloomberg reports,

Neither Argentine govt delegation nor attorneys for the South American nation or holdout creditors had arrived at 10am meeting called with court-appointed mediator Daniel Pollack in Manhattan.


Pollack didn’t respond to e-mail seeking comment


Argentine Economy Minister Axel Kicillof wasn’t part of delegation that traveled to NY

“All the music from the Argentine government indicates default,” according to a BTG report (as Bloomberg annotates):

“It is not that much that they are myopic about the consequences of default. Rather it is fear of the legal consequences of the RUFO clause”


A deal shouldn’t trigger RUFO clause “but govt wants to be sure, and nobody could give that sort of assurance”


“In this circumstance Cristina Kirchner herself seemed to have taken the decision of not paying”


“Still we do not lose hope on a deal”


Incentives of all parties favor a deal


Analysts expect volatile environment until July 30


“We will not be sure about the outcome until the very last minute”

In case of default, economy will suffer scarcity of dollars, which may lead govt to restrict imports further, thus harming value chains and reducing activity

Govt likely to print “an awful lot of pesos” given impossibility of tapping market


Central Bank could increase rate to lure peso holders

There may be pressure on parallel dollar market, which eventually could force govt to either depreciate the currency or try to settle with bondholders

Source: DolarBlue.net

UPDATE: Argentine Debt Talks in NY Postponed Until Tomorrow (maybe)

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Wed, 07/23/2014 - 14:06 | 4994076 Dr. Engali
Dr. Engali's picture

Regardless of what happens, it will not be a default. Even though it is a default.... It won't be.

Wed, 07/23/2014 - 14:12 | 4994108 SWRichmond
SWRichmond's picture

The most important thing to understand is that now, NOTHING MATTERS.  No one gives a fuck.

Wed, 07/23/2014 - 14:16 | 4994125 walküre
walküre's picture

Dollar default is like burning a stash of weeklies in the hood to keep warm

Wed, 07/23/2014 - 14:21 | 4994152 NotApplicable
NotApplicable's picture

Yes, but did Daniel Pollack get paid?

Wed, 07/23/2014 - 15:02 | 4994394 Omen IV
Omen IV's picture

youre wrong- this will affect Bond Indenture venues for resolutions of all kinds - NY and UK - anything could happen in either court house - there is no justice

Wed, 07/23/2014 - 17:31 | 4995137 SWRichmond
SWRichmond's picture

there is no justice...

that was my point no one can expect justice anywhere no one gives a f*** anymore.  the courts are a sham the markets are a sham its all a big f****** joke.  we are going to revert to the Lockean state of nature and we'll figure things out from there

Wed, 07/23/2014 - 18:16 | 4995329 balanced
balanced's picture

Is there any chance that this situation will have actual consequences? In other words, is there any chance that the fall out will be too disruptive to be papered over? I'm guessing not. Consequences are an outdated concept. The illusion of a status quo is all we have now, along with a slow but steady decline that will go on, and on... and on... ... and on.

Wed, 07/23/2014 - 21:45 | 4996218 BigRedWall
BigRedWall's picture

Other EMs might look at an Argentina funded through a BRICS bank or by China and wonder why they shouldn't do the same...thats an unlikely scenario but it might happen so there is your "chance".

Wed, 07/23/2014 - 14:34 | 4994240 NoDebt
NoDebt's picture

Excellent Haiku, Doc.

Wed, 07/23/2014 - 15:17 | 4994494 JLee2027
JLee2027's picture

Judge blinked long ago. I suppose they'll keep extending and pretending.

"""As the deadline of June 30th came and went, Argentina attempted to make $832USD million in payments to restructured hedge funds, but was forced to take the money back by Judge Thomas Griesa who ordered the original debt ruling back in June.1 The New York Courts demanded BNY Mellon give back the $539 million it received from Argentina, deeming the payment in violation of the equal payment clause. Griesa decided that Argentina must make payments to both the restructured hedge funds and the holdouts or service neither. Because neither received debt payments by the original deadline, Argentina is technically in default.  Griesa granted Argentina a 30-day grace period, pushing back the deadline to July 30th. However, Argentina isn’t pleased with the postponement, still accusing the judge of making an “impossible” order."""



Wed, 07/23/2014 - 16:01 | 4994716 rsnoble
rsnoble's picture

So far the name of the game has been: NO defaults, NO bad economies, NO civil wars.........and nothing else that could sound bad.

Wed, 07/23/2014 - 14:06 | 4994079 Grande Tetons
Grande Tetons's picture

I remember when I skipped class to get a handjob. Let us hope that is what is at play here. 

Wed, 07/23/2014 - 14:09 | 4994089 1stepcloser
1stepcloser's picture

i usta get handjobs in class... good ole game of chicken...I just say cut the floor play and just grip it and rip it...

Wed, 07/23/2014 - 14:12 | 4994102 Grande Tetons
Grande Tetons's picture

I installed interior windshield wipers. 

Wed, 07/23/2014 - 14:11 | 4994082 NOTaREALmerican
NOTaREALmerican's picture

No credit, bad credit,  NO PROBLEMO.   You can still drive away with a new car from crazy Eddie's car bling emporium. 

Wed, 07/23/2014 - 14:08 | 4994083 l8apex
l8apex's picture

Looks like dolarblue.net is reporting 13.0 right now.  Wish I could get down there right now for some good steak and red wine.  

Just remember to bring lots of USD with you because otherwise you're on your way to Uruguay to get any more USD.

Wed, 07/23/2014 - 14:36 | 4994172 Oldrepublic
Oldrepublic's picture

re: 18apex and  black market dollar rate: international tourists getting money via a debit card in Argentina will get the official rate, no US cash dollars available, I understand that USD notes are available at Argentina-Uruguay border  ATMs

Wed, 07/23/2014 - 15:04 | 4994403 DoChenRollingBearing
DoChenRollingBearing's picture

Bitcoin is apparently scarce in Argentina, you can find people there who will give you Argentines pesos at the black market US$ rate.  Bring enough US$ CA$H or BTC, you can pay for your trip.

Enjoy your wine & steak while there!  

Wed, 07/23/2014 - 15:47 | 4994646 brunoaa
brunoaa's picture

There are a lot of places where you can change dollar and are resonably safe, any local/hotel personnel will indicate one, avoiding the changers advertising in the street which are not always ok. 

Wed, 07/23/2014 - 15:07 | 4994416 Omen IV
Omen IV's picture

i converted $1,500 US at 11.9 -  5 weeks ago

the best steak in Palermo - Don Julio

Wed, 07/23/2014 - 15:18 | 4994495 DoChenRollingBearing
DoChenRollingBearing's picture

In La Recoleta, we liked "Montana Ranch".  Mmm...

Wed, 07/23/2014 - 15:40 | 4994616 moroots
moroots's picture

Don Julio is indeed fantastic.  The only place I ate in my short time in BA that didn't overcook the steak.

Wed, 07/23/2014 - 16:13 | 4994775 nodhannum
nodhannum's picture

I like the steak, wine and lobsters, but the real treasure is the women down there.

Wed, 07/23/2014 - 14:10 | 4994095 disabledvet
disabledvet's picture

Again...send in the battleships. Port all four in New York Harbor...have them re-fitting with the finest...hired some retired sailor dudes and "pull the trigger on this thing."

Wed, 07/23/2014 - 14:31 | 4994221 icanhasbailout
icanhasbailout's picture

yep, what the world desperately needs right now is a precedent for taking part of a country's territory by force as collateral for defaulted sovereign debts


that would be sooooooo freakin COOL

Wed, 07/23/2014 - 16:38 | 4994888 twh99
twh99's picture

If they had done that in the past there would be no Argentina.  They are a habitual deadbeat nation.

Wed, 07/23/2014 - 14:11 | 4994098 syntaxterror
syntaxterror's picture

Wow, Argie isn't getting the same 2.2% free money rate as their Spanish friends across the Atlantic? That's the shocker here. 

Wed, 07/23/2014 - 16:38 | 4994893 twh99
twh99's picture

There are no Germans obligated by treaty to back them up.

Wed, 07/23/2014 - 14:13 | 4994111 robertocarlos
robertocarlos's picture

Some of the best meetings happen when nobody shows up.The saying is you can ignore things but you can't ignore the consequences of ignoring them.

Wed, 07/23/2014 - 14:14 | 4994118 q99x2
q99x2's picture

Argentina defaults often. They are cool. Anybody seeking to make interest and profits on people or organizations that don't have enough money should lose everything. It is the moral thing to do.

We will come rejoicing bringing in the thieves.

Wed, 07/23/2014 - 14:17 | 4994137 walküre
walküre's picture

For real. There has never been a better time to pick up physical. Forget whatever gains or losses you may have. What you hold and who will accept it matters far more.

Wed, 07/23/2014 - 14:18 | 4994141 buzzsaw99
buzzsaw99's picture

i blame the capitalist swine

Wed, 07/23/2014 - 14:18 | 4994142 SmittyinLA
SmittyinLA's picture

The sham can continue indefinitely as long as the judge and his minions get paid.

the Detroit liquidation that we all prayed for and needed aint gonna happen.

Wed, 07/23/2014 - 14:19 | 4994146 orangegeek
orangegeek's picture

Daniel Pollack: (pause) So what happened? The snooze alarm, wasn't it?

Argentina: Man, it wasn't the snooze. Most people think it was the snooze, but no, no snooze.

Daniel Pollack: AM/PM.

Argentina: Man, it wasn't the AM/PM. It was the volume.

Daniel Pollack: Ah...the volume.

Argentina: Yes, the volume. There was a separate knob for the radio alarm.

Daniel Pollack: Ah, separate knob.

Argentina: Yes, separate knob. Why separate knob?! Why separate knob?! (frustrated)

Daniel Pollack: Some people like to have the radio alarm a little louder than the radio.

Argentina: Oh, please, man, please!

Daniel Pollack: Don't worry, it's not gonna happen again. Not if I have anything to say about it.


Wed, 07/23/2014 - 14:21 | 4994148 pakled
pakled's picture
"...Goes Surreal As Neither Side Turns Up For Meeting."



At least in Battlestar Galactica one side would always show for the Human/Cylon meetings. (before the shite hit the fan)

Wed, 07/23/2014 - 14:20 | 4994151 Milestones
Milestones's picture


Wed, 07/23/2014 - 14:21 | 4994153 Gringo Viejo
Gringo Viejo's picture

Don't Cry For Me Assholes! I'm about to stiff ya!

Wed, 07/23/2014 - 14:22 | 4994156 Pumpkin
Pumpkin's picture

Well, finally, some people in charge are getting a grasp of the gravity of the problem.

Wed, 07/23/2014 - 14:23 | 4994164 Dien Bien Poo
Dien Bien Poo's picture

i wont make any friends here but IMHO, Argentina should stuff Singer et al. Its not like they dont know the risk of playing the Argie curve. Serial defaulters who will do anything but pay creditors in the short term. You play you pay. 

I wouldnt piss on an Argentine if he was on fire, much less buy their bonds to try and manipulate a good outcome. 

Elliott will be left holding its proverbial. 

Wed, 07/23/2014 - 15:56 | 4994648 Almost Solvent
Almost Solvent's picture

Elliott will be left holding bonds it paid about .02$ on the dollar to acquire and upon default can use them as a write off OR try to seize Argentine assets for the next 20 years (enforcement length under NY law).

fixed it

Thu, 07/24/2014 - 08:13 | 4997315 Dien Bien Poo
Dien Bien Poo's picture

In other words, a momumental waste of time, effort, stress and opportunity. My heart bleeds for them. No seriously, it does. 

Thu, 07/24/2014 - 08:14 | 4997316 Dien Bien Poo
Dien Bien Poo's picture

In other words, a momumental waste of time, effort, stress and opportunity. My heart bleeds for them. No seriously, it does. 

Wed, 07/23/2014 - 14:24 | 4994169 Joebloinvestor
Joebloinvestor's picture

Doesn't this trigger a "bad faith" clause somewhere?

Wed, 07/23/2014 - 14:28 | 4994200 lasvegaspersona
lasvegaspersona's picture

It's Argentina....this is just how they are. Beautiful country, wonderful cities but centuries of questionable management.

May be time to hoist the 'Las Mavinas son Argentine' signs.

Wed, 07/23/2014 - 15:21 | 4994515 DoChenRollingBearing
DoChenRollingBearing's picture

"Questionable management" is an understatement.  I agree on all the rest.

Wed, 07/23/2014 - 14:32 | 4994226 gosh
gosh's picture

I dont get why the debt holders didnt show up if they go bankrupt I assume the debt holders would get nothing.  Why not negotiate?

Wed, 07/23/2014 - 14:39 | 4994266 QQQBall
QQQBall's picture

The holdout bondholders won in court and they must figure they have a line on enough assets to be made whole, so no need to negotiate. If the Argentines show up and the creditors don't, they would look like even bigger morons.

Wed, 07/23/2014 - 14:43 | 4994290 One eyed man
One eyed man's picture

This is high-stakes poker (or chicken) being played. Showing up for negotiations would be interpreted as a sign of weakness.

Wed, 07/23/2014 - 14:58 | 4994376 nonclaim
nonclaim's picture

That. And to be fair nobody asked for negotiations either.

It was a judge that, thinking he's very smart, imposed it against all parties.

Wed, 07/23/2014 - 15:05 | 4994412 HardlyZero
HardlyZero's picture

Argentine Standoff:  The Good, The Bad and The Bankrupt.

to the wire.

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