Thursday, September 25, 2014

More on Argentina and the vulture funds

Part 3 of an Argentine documentary on sovereign debt and the vulture funds, Deuda: Historia de una extorsión (3 de 5) TV Pública argentina 20.09.2014. This segment features an interview with Argentine Economics Minister Axel Kicillof.

See previous posts for Parts 1 and 2.

Alison Frankel has a vulture-friendly column that looks at the possibility of Nixon-appointed zombie judge Thomas Griesa imposing sanctions on Argentina, Will contempt sanctions get Argentina to yield? Reuters 09/25/2014.

The vulture funds and their lobbyists have been making a major media push against Argentina. This Bloomberg Businessweek article seems to at least partially reflect the results of that lobbying: Max Abelson and Katia Porzecanski, Paul Singer Will Make Argentina Pay

The print title of the piece is "The Man Who Ate Argentina." And both the print and online versions feature this picture of vulture fund manager Paul Singer, the most visible villain in this fight, as though he had achieved a triumph which he obviously hasn't:

There are some interesting sides of the piece. For instance:

A person who worked on Argentina at Elliott says the firm thinks the country has abandoned the market’s guidelines, turning a debt into an anti-American political ploy and playing a game of brinkmanship. The person, who asked for anonymity because of Singer’s penchant for privacy, says Elliott sees the saga as a fight between mercy and justice, with the Argentines begging for amnesty and Singer wanting to uphold his lawful rights. He adds that the hedge fund thought one of its people was possibly being followed by an Argentine agent or lawyer.

A current colleague, who also would only speak about the case anonymously, says it’s simply an issue of free markets. Singer believes contracts must be respected and laws enforced, the colleague says, and has the resources to try to see that they are. He has dug in deep, and he wants to win.

My guess is, he thought Argentina would never allow the technical default to happen, it would be too debilitating for the entire country,” says hedge fund manager J. Kyle Bass, whose Dallas-based Hayman Capital Management bought Argentine bonds last year. “The bottom line is, he’s a tremendous distressed investor. And he’s a profiteer at other people’s expense.” [my emphasis]
The article also talks toward the end about his work as chairman of the rightwing Manhattan Institute for Policy Research, which the piece generously describes as "a think tank that promotes 'economic choice' and 'individual responsibility.'"

It also notes:

Singer has given at least $1 million each to the Republican Governors Association, a political action committee for Mitt Romney, and another PAC affiliated with strategist Karl Rove. Among his larger concerns are intrusions on freedom. Even one group that looks like a glaring exception to his tuxedoed conservatism, American Unity, his PAC advocating for gay rights, supports “pro-freedom Republicans.” It aims to spread “freedom for all Americans,” including his son, a doctor. The two appeared on a panel this year featuring finance executives and their openly gay sons.

The Manhattan Institute, noted Singer, is “home for those who have the courage to say what is right and stick with their views, no matter how intense the pressure to conform to a comforting-yet-false consensus.” He promised its members will “do what we can to preserve — to prevent — New York City from becoming, say, New Havana.” [my emphasis]
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