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Is JPMorgan About To Bailout Argentina?
Update: According to Ambito the deal is a no go as Italian bondholders (and likely all others) claim that a private deal with a buyer of holdout bonds would also trigger the RUFO clause, thus making the deal meaningless and forcing Argentina to payout billions more. From Ambito:
Italian bondholders say a private agreement also would trigger the clause RUFO
The representative of a group of debt holders Argentina Italy, Tulio Zembo said that any agreement between private RUFO also would trigger the clause.
"I do not understand the idea of banks because that would trigger the RUFO" Economy Minister said yesterday. Please do not help us because it makes the situation worse," said Zembo in dialogue with Radio La Red
"All that is settlement discussion will have to olvidárselo until January 2015, because you can not argue," he said.
For the representative of Italian bondholders "the drama of a default is when the debtor is kneeling and can not pay, that would be a problem, here's a serious problem but should concentrate all legal guns to go," he said by way of conclusion.
* * *
With Argentine politicians explaining that "Argentina is not in default" and ISDA set to decide if last night's default is an 'official' trigger event for CDS, it appears Kirchner, Kicillof, and their (k)omrades may have found an angel. The initial 'bailout' plan, by which Argentine banks bought the holdouts defaulted debt (then promptly acquiesced to Argentina's old debt-swap agreement), failed last night; but, as WSJ reports, JPMorgan is in discussions to buy the defaulted bonds of Argentina's holdout creditors. While this would not impact the default decision (that is history), it would speed up the exit from default rapidly. Of course, JPM is not doing this out of love for Argentina, we suspect they are on the hook for a few billion CDS and need some cheapest-to-deliver bonds to help them through the settlement process.
It appears most have taken profits or unwound positions in CDS over the last few years but there remains around $20 billion notional outstanding in Argentina CDS
CDS has surged...on expectations of a trigger being called by ISDA
Still, the bonds remain at lofty prices because some investors seem hopeful that Argentina can quickly emerge from default. Many were focusing on a potential private-sector solution. Argentine press has reported this week that private-sector banks are trying to hatch a plan to help Argentina pay off the debt.
...
J.P. Morgan is in discussions to buy the defaulted bonds of Argentina's holdout creditors, according to a person familiar with the matter.
Buying the bonds is one of many options, and the talks between J.P. Morgan and Argentine bondholders were still fluid, the person familiar said.
...
"The expectation of a bank deal is supporting bond prices," said Siobhan Morden, head of Latin America strategy at Jefferies LLC. "But it's difficult to trade these headlines when you're getting whiplashed" by sharp price moves in thin trading. "Most people have adopted their view, taken their positions, and waited to see what the final outcome will be," Ms. Morden said.
* * *
We note that a handful of Wall Street banks earlier this year pitched bond sales that would have paved the way for a deal between Argentina and its holdout creditors. Argentine officials didn't approve the proposals then... maybe they will now...
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JPM has the Argentina strain of financial Ebola! What stage of grief is bargining again?
How does one bankrupt entity bail out another bankrupt entity?
Must be that "new math" that I missed in school.
Wow, where is JPM going to get all the cash to buy these bonds?
It is not like they can just borrow it from the FED for nothing.
pods
maybe JPM is doing it to discourage Argentina from engaging with bilateral trade with the bric's and cementing their status of being a part of the almighty dollar.
or maybe JPM just has that much cash. either way if they can pull it off it saysa lot. instead of the banks being taken down when soveriegns default it's the banks buying the soveriegns after they default.
God bless JPM as they try to save US taxpayers some money!
It's not cash.. it is credit that can be synthesized to infinity (from the Fed of course)..
Until it can’t.
The JPM Sovereign Put. Let the deficits begin! (Continue to be more precise)
Argentina's affairs are just so Messi.
Does anyone think the ISDA would actually let this be an event that really triggers CDS? No way, Jose! Watch!
And when will a Goldman (or JPM) syndicate step in with gold backed loans? Or is Argentina's 61 tonnes of gold all out on deposit with the bullion banks already (i.e. Disappeared and sold on in Zurich and London)?
“Does anyone think the ISDA would actually let this be an event that really triggers CDS?”
The ISDA ( International Suspension of Defaults Association) is there to rig that market so as to keep the scam alive and assure that a default never happens.
If "Selective Default" doesn't mean "default" clearly enough to trigger CDS...oh, I see, it's "selective"...
The Fed is giving JPM the mulga...don't be fooled
LTCM is on line one Janet
JMP to Argentina:
- Vuestra basura es lo que nos da de comer. Muchas gracias.
pods- JPM can probably buy at a deep discount, and the Fed will probably give them full face value!
Must be JP Morgan has sniffed out some real gold down there. Do you think?
JPM A.K.A. Uncle Sam
Its called "Common Core" where you get a trophy for trying.
"Math Death" - George W Bush
It's the same "new math" that prompts a Debt-Full nation to impose sanctions on a Debt-Free one.
Lets be clear, IMO, no bank is ever "bailing out" a Country!!! Another propaganda, headlining, bullshit narrative, being pushed by someone on a very large hook!!
These GD central bankers have become victims of their own bullshit, and they REALLY believe that they can "talk"'down or out of any problem without actually facing the problem, thus avoiding the whole damn thing!!
It's has worked a dozen times or more since 2008, so their delusion is not without merit, however delusion all the same!
I liken it to when your raising your children, and at some point, both the parents and child's self interest sync up, and parenting seems like a breeze!! You tell them to clean their room and you'll buy them a toy, and everything feels glorious!! However, when the child gets to an age that they "want things" the parents know are not in their best interest, that's when the SHTF and you find out what it's all about!!
Up until recently, the Citizens (parents) and the Wall Street Central Bankers (children) have been living in self perceived, self interest harmony, but pretty soon the parents are going to have to face the reality, its discipline time now!!!
JPM has the Argentina strain of financial Ebola! What stage of grief is bargining again?
The third stage.
Denial
Anger
Bargaining
Depression
Acceptance
Actually the Financial System implosion is something which we can survive if we are prepared. I have innoculated myself with Gold and Silver.
Ebola, on the other hand, does not give a damn about Socioeconomic Status. It is the great equalizer as the Financial Elite, as well as the Homeless on the streets, are equally susceptable to horrific deaths.
With Ebola nothing else matters.
There will be Tens of Millions, if not Hundreds of Millions, dead by Christmas.
You, or I, or both, may be dead depending upon the actions or inactions of Multinational Corporations and World Governments.
The most pressing problem which we face currently is this Pandemic. Nothing else matters. (I will guarantee that nothing Financial will matter if we are dead.)
"There will be Tens of Millions, if not Hundreds of Millions, dead by Christmas."
Duly noted.
It's possible that globally we will reach 100 million by Christmas if this bitch jumps the chain, however in the West, two equally terrifying things will occur: first the outbreak will be real and shake the average citizen from their self induced, fiat created coma of invincibility!! Second, the Federal and State governments will declare martial law to impose this quarantine that will be required to stop this outbreak!!
If you thought America was never the same after 911, wait until you wake up, post pandemic Ebola outbreak!! If of course, your one of the lucky ones, who makes it!
Isnt JPM a part owner of ISDA...?????
ISIS,
Islamic State of Iraq and the LevantI guess it's not all over but the crying in Argentina
JPM is part owner of Obama
Is this where GS runs to the treasury to ask for a bailout on the CDS that AIG cannot pay..and make a quick 12 billion overnight
Just what in the hell does trigger CDS?
Nothing apparently
Even if you're defaulting on bonds you already defaulted on? Jeez, I gotta ge me some of that.
CDS is a joke. its like buying insurance on a nuclear disaster in your area.. You keep paying premiums, but if a disaster strikes, good luck collecting
Is that other maggot bank, Goldman, swooping in to eat some of the carcaas too?
Warum nicht.
Translated the FED is using JPM to bailout hedge funds. Can't have pensions or 401ks take a hit during an election year.
JPM=FED...so the FED is bailing out Argentina
Exactly
as long as the maggot holdouts get their bonus fuck the 40 million people in Argentina. It's the maggot way.
It's not bondholders that are fucking the Argentinian people, it's their own government. Just like the US. You can't blame the bond holders for looking out for their own interest any more than you can blame a ZHedger for exchanging worthless dollars for gold.
those maggot holdouts bought those bonds for pennies. then they found a corrupt usa judge to rule in their favor. argentina should have converted all their assets into gold and then defaulted entirely. fuck new york, fuck the hedge funds, fuck the banks and billionaires. soros must be slipping if he missed this opportunity to screw an entire nation for personal gain.
@buzzsaw. they didn't need a corrupt judge. the contract was in usa law and in simple english. an intelligent 10 year old would have come to the same decision. what is it about "equal treatment" that you do not understand? the argentines are serial thieves.
Well did you know that if Argentina paid the holdouts (who bought the worthless debt at pennies), it would be MORE then they paid the people they paid the restructured debt to?
Now, since we've established that, does this have any ramifications?
Yes, the RUFO clause would of been triggered, the right under future offer. What is this?
Simple it means the deal they got with the restructured debt meant they could not give the holdouts more then they gave those that agreed to the restructure.
If they did...the following would happen.
1. Argentina heads, could be sued.
2. Argentina heads, could be jailed.
3. The restructured debt, would default to a higher level, and thus INCREASE Argentina's debt by 200-500 billion dollars.
So why would Argentina pay those that took no risk, because they bought it for pennies AFTER the default, they aren't the original owners....
And by doing so not only reward those that didn't invest with them, but also risk personal financial costs and jail time to do so? Not only that they would make their national debt skyrocket by 200-500 billion dollars!
Do you understand that? By paying this, they would be out that money + 200-500 billion MORE!
You think that is a prudent move? Do you think that is a wise move?
Judge Greisa not only is corrupt, he is a fucking moron. He basically said, Argentina you must break your restructure agreement and pay 200-500 billion dollars more on your debt just so you can give these vultures a huge profit after not investing one dime in Argentina and potentially send some Argentinians to jail.
Oh and beyond this, again, judge Greisa like the corrupt moron he is, wanted to expropriate money from one camp and give it to another.
That's right. Basically Argentina would pay their restructured payment, and Judge Greisa would block that, confiscate it, and give it to the holdouts.
How would you like it if your house or car payment that you sent was, by a judge's order, taken from those entities, and given to your credit card company, and now you are in default for your house and car?
Because that's what Greisa was planning to do. Take their legitimate payment, steal it, and reroute it to the vultures.
Judge Greisa not only is a moron for not realizing how payment would fuck up Argentina big time, he decided it was ok to steal their payments and give them to someone else, a bunch of vulture funds who never invested in Argentina.
So are we going to call this judicial theft? When a judge reroutes your payment to a third party by his own self and demands that you break your contracts and expose yourself to all that, that would entail?
Judge Greisa...not just a moron, but corrupt as well.
ZH should be all over this. Because whatever you think of Argentina, this is what Judge Greisa has demanded.
Unbelievable to see down arrows - unless they are from the speculators or the CDS holders. How can anyone support the predatory purchase of financial products in hopes of a 10 bagger - especially by rigging the casino in their favor!
The down arrows are from the gov.bot douchebag socialist assholes....
They use sites like ZH to spew shit and rant like idiots.
I LOVE running into these fucksticks IN PERSON....grind them into dust. Leave them bleeding - sputtering Fuckbama odes....asinine Bush did this/Bush did that....that's when I really pounce on the hapless fuckers....
I give em my 5 questions.....then let they themselves fall into their hole of shit.
Keyboard cowcunts....
And we all know who bails out J.P. Morgan, don't we.
this would prove - AGAIN - that the entire "CDS" asset class is nothing but a giant SCAM.
And that the underlying asset really does matter to derivatives.
Argentina has a socialist government. Why would anyone step in to save them? I know. It's a rhetorical question.
Argentina's oil production has dropped 43% in the past 10 years. They have gone from oil exporter to importer.
THAT is what is wrong. They could be a country of Nazis or they could be a country of Jews or they could be a country of bleeding heart Mother Theresas. None of that shit matters.
If you export oil, you have money. If you don't, you're on the way to oblivion.
The ideal situation for the banking mafia is mostly welfare-socialist governments to leech from and one warfare-socialist government to act as enforcer.
This is where the goblins come out and play because noone knows how many CDS are out there or other derivitives that connect to this...I still believe they will not call this a default...never will..so noone has to pay off those bets..rigged game again..sorry gamblers
JPM/US FED .... Bail Inc.
And who will bail out JPM? Or should I say "bail-in"?
You. And me I guess.
“If money isn’t loosened up, this sucker could go down,” Bush declared.
He was never that smart.
more like, "Is our children learning".
The FED. They have to can't have a bail-in of people's money during an election year. Only way that even remotely happens is they target those who don't pay their fair share aka corporations and spin the populist bullshit to placate the left and haves fast becoming have nots using the divide and conquer playbook. That could happen and would cement the FED/Wall Street to Obama and the (re)'pro'gressives in the eyes of the public.
Pay attention to the MSM, if they start ramping up the rhetoric on income inequality, paying your fair share, economic patriotism bullshit then that means most likely some populist wealth redistribution shakedown to reimburse the FED for bailing out them hedgefunds using JPM as the storefront is on it's way.
Please JPM=The Fed and they can "borrow" at zero percent.
"We note that a handful of Wall Street banks earlier this year pitched bond sales that would have paved the way for a deal between Argentina and its holdout creditors. Argentine officials didn't approve the proposals then... maybe they will now..."
Whatever you do Argentina, don't give in to the bankster plan.
Maybe they plan to create toxic bundles of bond backed securities which they can bet against? That seems to have worked well with mortgages in 2008, until the entire banking system collapsed.
This would only be done as a "favor" to the US Gov.; to create the appearance of "stability"
Just print bitchez! It's like a green easy button.
So this really means the FED is bailing out ANY large entity with insolvency problems
The problem with Argentina is not that they likely have contagion issues.
The problem is that they have precedent issues. TPTB thought they had all that shit stopped in Greece. Now they don't.
They thought they had a way for countries to "default" successfully via reissuance of bonds with multi decade maturities in return for the ones that can't be paid now, and have governments FORCE bond holders to accept that deal.
This is an ugly precedent. Nobody forced those holdouts to accept a deal. Though, that may be happening right now. We may see Griesa killed or removed in the next few months.
ot: http://www.bloomberg.com/news/2014-07-31/credit-suisse-responds-to-regul...
If it walks like a default and talks like a default, it's definitely not a default.
Sincerely,
ISDA
Happy to cover your debt, for some sub market priced oil.
We won`t tip the scale too far to our advantage
Just stand over there and bend over - we`ll take care of the rest
luv JPM
Greg Palast's take on the Vulture vs Argentina:
"Chewing Argentina's living corpse"
http://us4.campaign-archive1.com/?u=33e4ec877eed6a43863a4a92e&id=af37b4d...
Wow, excellent article. To think I had heard none of this before.
Why aren't PM's moving higher??????
Cuz it's really Precious Paper, of course.
ManNIP-pEul-LATION....
"Please do not help us because it makes the situation worse"
ROFLMAO!
Pure comedy gold.
BUY THE FUCKING DIP.
QE IS STILL ON . 25 BILLION A MONTH + 50 TIMES LEVERAGE WILL BUY THE FUCKING DIP.
Whatever they do, it was already planned long ago.
The Fed "drive-in window" is to banks what Krispy Kreme's is to my old lady. "Fresh off the presses boys. Now go throw a patch on that fucker before anymore air leaks out."
"it appears Kirchner, Kicillof, and their (k)omrades may have found an angel....JPMorgan is in discussions"
Normally in a situation like this it's loan-sharking: some government members in collusion with the banking mafia rack up more debt than can be repaid so repayment involves the transfer of real assets from the country involved to the banking mafia.
This time though I wonder if it's also at least partly the US taxpayer backing the FED backing JPM to prevent Argentina drifting to the BRICS?
When JPM's got your back you can rest assured they're fucking you hard up the ANUS.
Amazing how many billions you can make as an insider in the "modern" economic system. It's almost like the game is... RIGGED or something!
Will another JPM chap get killed/commit kamikaze again if the deal falls apart? Just wondering...
It’s not just hedge funds that own Argentine bonds - Some mutual funds make bets as situation heats up
29 July 2014, by Ben Eisen - New York (MarketWatch)
http://www.marketwatch.com/story/its-not-just-hedge-funds-that-own-argentine-bonds-2014-07-29
Hedge funds aren’t the only investors with money on the line as Argentina scrambles to avoid a bond default.
A number of mutual funds, including funds run by Goldman Sachs and Fidelity Investments, have exposure to Argentina, which must reach a deal with a group of bond creditors by Wednesday, or face default for the second time in 13 years.
JP Morgan as an arm for the U.S. Government is obviously worried about what China and Russia are going to be doing there.Too late,your an IMF-World Bank tramp.
The writers of the original bonds put some RUFies in the fine print and slipped them to unsuspecting Argentina.