Sure enough, just out from the FT: Argentina will not pay Repsol of Spain what it is asking ($10.5bn) in compensation for nationalization of YPF, says deputy economy min
... but will settle for what it ends up getting: nothing. Of course, in the meantime, there will be a lot of kicking and screaming, but that's great: Risk On - Off markets demand distractions. From the FT: "These acts will not go unpunished" said Antonio Brufau, Repsol’s executive chairman during a two-hour press conference on Tuesday, at which he attacked Argentina’s “revisionism” over YPF’s success, and its energy policy over the past decade." Said otherwise, this aggression will not stand, man. Ok, fine. Here is Argentina's counteroffer.
And since we now know what the true value loss to Repsol is, we can now see why CDS sellers would be even more concerned.
More from the FT:
"The Argentinian president has committed an illegal and unjustifiable act following a campaign intended to push down the share price of YPF and allow expropriation at a low price,” he said. “This is just a way of covering up the social and economic crisis facing Argentina.”
Spain has promised “clear and decisive action” against the move in the areas of trade, diplomacy, industry and energy, and summoned Argentina’s ambassador on Tuesday morning.
Madrid has expressed its confidence that fellow European Union members will support it against Argentina, while Mariano Rajoy, prime minister, is using a previously scheduled trip to Latin America to rally allies.
And it is not just Spain: the EU, best known for nationalizing Greece recently, has also decided to throw its "economic weight" into the fray:
The European Union signalled it would throw its full diplomatic and economic weight behind the Spanish government. José Manuel Barroso, president of the European Commission, said he was “seriously disappointed” by the Argentine move and called on Ms Fernandez to find a “mutually agreed solution” to the stand-off that does not harm Argentina’s business environment.
“We expect Argentinian authorities to uphold their international commitments and obligations,” Mr Barroso said, noting that Buenos Aires has existing bilateral agreements with Madrid to protect Spanish investments in Argentina.
Much more humor pending. In the meantime, guess who is the winner:
Responding to speculation that Argentina had begun contacting Chinese state-owned oil companies in a search for investment in the new YPF, Mr Brufau said: “The Chinese are very serious, and no one serious enters through the back door.”
That's right: as the broke serfs fight amongst each other for the scraps in a world becoming increasingly lawless, China wins again.